Are you seeing fewer home sales in your market? Between the low inventory and the increased interest rates, the housing market has cooled from the intense pandemic years. But this doesn’t have to slow down your real estate business…you can always pivot into the rental market!
Around 39% of American households rent rather than own, and that number is on the rise. Plus, renters move far more often than homeowners. Around 16% of renters moved in 2021, compared to just 5% of homeowners.
Having so many renters and such a high move rate creates substantial opportunities for agents in the rental market. Your renter-clients of today might even become your buyer-clients of tomorrow!
In this article, we’ll explain how real estate agents can serve the rental market in two different ways:
As a leasing agent, representing property owners
As a rental broker, representing renters
We’ll also give you some insight into the income potential of working with renters and offer a few tips for getting started!
How to Serve as a Leasing Agent, Representing Property Owners
Leasing agents are responsible for finding qualified renters on behalf of rental property owners. This involves tasks like:
Marketing the property for rent
Showing the unit to prospective renters
Assisting renters with the rental application
Drafting the rental agreement
Making sure the move-in goes smoothly
Your service could stop there, or you could continue to manage the day-to-day operations as a property manager. This would include responsibilities like collecting rent, handling maintenance requests, and managing lease renewals.
How Leasing Agents Get Paid
Your pay as a leasing agent depends on your agreement with the owner. In many cases, the agent and owner negotiate a commission rate. The agent earns a percentage of the first full month’s rent once a renter successfully moves in. A 50% commission is common, but this can vary widely by market. In some markets, leasing agents can command a full month’s rent as their commission.
Institutional investors with lots of units might also employ leasing agents, offering an hourly wage or annual salary plus bonuses for signed leases. This is most common with large apartment complexes in major metro markets. While income potential varies by market and fee structure, the average leasing agent earns around $60,000 per year.
How to Serve as a Rental Broker, Representing Renters
Rental brokers are less common than leasing agents. In most markets, renters conduct their own property searches and rely on the property owners’ listing agents to draft a fair rental agreement. But, in large, renter-heavy metro areas like New York City, there is demand for rental brokers to work on behalf of the renters.
Similar to working as a buyer’s agent, rental broker responsibilities include:
Finding suitable properties for your clients
Negotiating terms on behalf of your clients
How Rental Brokers Get Paid
Rental brokers are paid by the renters once the unit is secured. The fee is negotiable and varies by market. But, a commission equal to one month’s rent is a common practice. It’s difficult to say how much you could make as a rental broker. Many rental brokers also serve as buyer's agents, so there isn’t a clean data set of annual earnings for agents who solely act as rental brokers.
How to Get Started as a Leasing Agent or Rental Broker
Getting your real estate license is the first step toward serving the rental market as a leasing agent or rental broker. If you’re not already licensed, you can complete your real estate classes online, and be ready to take your real estate exam to earn your license in just a few months!
Then you need to decide how you want to work. Does the stable income of being an employed leasing agent appeal to you? Then check out large apartment communities or major property management firms in your area to see who’s hiring. Do you prefer to be your own boss? Then start marketing yourself as a rental agent to the property owners or renters you want to work with.
The market is full of renters on the lookout for their next place. And you can make a living helping them in their search!