Forums / Property Investing / Help Needed! / Finding a tenant for a House- Fee for Service Basis

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  • Profile photo of gcpgcp
    Member
    @gcp
    Join Date: 2010
    Post Count: 35

    We have a house that we are looking at renting out – we have just moved recently within the same area.

    If we use a real estate agent to find a tenant/manage the property they would expect about 1 weeks worth of rent and about 7% of the weekly rent figure for their trouble.

    If we were to employ a local real estate agent only to find a suitable tenant on a fee for service basis and manage the property ourselves how much would we expect to pay them?

    We do not see the point of having a agent manage the property – we do not live that far away from the house and we are happy to do it ourselves. We will need a agent initially to find a suitable tenant and assist with the initial paperwork.

    I would be interested to hear from people who have gone down this path. Thanks.

    Profile photo of JB111JB111
    Participant
    @jb111
    Join Date: 2012
    Post Count: 7

    Think about it.

    The real estate agent would just get the first person who applied for it suitable or not.

    The agent wouldn't care if they were good tenants or not as they won't have to deal with the tenant or you again.

    You're better off looking for your own tenant.

    Or, you can let the agent find the tenant, let them manage it for a year or so (to be fair to them) and then take over it yourself.

    Having renting out a place before, I'll let the agent manage it for the tax deductible $1,000 or $1,500 they will charge annually.
    It's not worth the stress IMO.

    And if you have a bad tenant you want to evict, they are worth their weight in gold.

    Profile photo of gcpgcp
    Member
    @gcp
    Join Date: 2010
    Post Count: 35

    Thanks for the response. Yes we did consider the option of letting a agent find a tenant and manage the property for the 12 months. At least that way we can establish if the tenants are decent.

    We where in similar circumstances a few years back and from the start the tenants knew us (pretty much in the same street). In the end it was easier for us to deal with tenant (agent was not very good and did not add any value). We were fortunate back then that the tenants were very good people and we had no issues what so ever. Yes, the paperwork work part of it is easy. The challenge is always finding good tenants.

    Profile photo of renelrenel
    Member
    @renel
    Join Date: 2012
    Post Count: 40

    How do you advertise for tennants? The main websites only take listings from agents…

    Profile photo of WomeninPropMelbWomeninPropMelb
    Member
    @womeninpropmelb
    Join Date: 2008
    Post Count: 234

    Having been a former agent- property management is the hardest thing to do. Sales is easy.
    I have my IP on the market and I am happy to have an agent do it for me. If I was to rent it out again- same- I would get the agent to do it for me. They have a data base of tenants and buyers and have experience in working out the wood from the trees so to speak- a bigger pool to choose from and can spot a dodgy tenant from the good ones.
    My parents rented out their IP to a guy through a friend and the agent said from the outset – he is going to be trouble- guess what – HE WAS.
    You can get the agent to find a tenant and you can take over the management for yourself- though sometimes it is better to have an agent deal with it so you are arms length. Agents know what is acceptable and what is not when dealing with tenants. For example what do you do if the tenant wants new carpet? Wants an air conditioner installed?
    I agree that a lot of agents do not add value. Just because I was an agent does not mean I am advocating for agents- a lot of them do themselves no favours. But if you get an good agent- they are gold- and keep it to yourself – you dont want them to get too busy with everyone else’s property management LOL.
    A weeks rent is about the going price of getting an agent to find you a tenant.
    You can advertise in local papers or a sign out the front.
    There are a lot more “do-it-yourselfies” nowadays so there may well be a site you can advertise for yourself- Gummtree for example.

    Profile photo of brizziegirlbrizziegirl
    Participant
    @brizziegirl
    Join Date: 2009
    Post Count: 16

    Hi, we have been managing our properties for the past 7 years ourselves. We have used agents in the beginning and some are good and some are not so good. One company sent the monthly rental statements and it took me an hour to go through them to confirm the rent had been received in time, they were that confusing.

    Another time, a prospective tenant approached us while we were at the house and we referred him to the agent. The agent took over two weeks to begin processing his application – I was not happy.

    We call the tenant’s references. Even a doctor, I called her accountant because she was in business and I wanted to check she was ok to pay the rent.

    One piece of advice I saw here actually I think is quite good – if you are vetting tenants yourself and they come with a car, check out how the car looks and that’s an indication of how they live.

    We also don’t disturb the tenants much. We want them to feel that it’s their home. We repair things promptly and work to maintain a good relationship with everyone. Most of our tenants are pretty long term and we are happy with them.

    We find that it suits us to manage the properties ourselves because my husband is handy and wants to generally repair things himself. We did find that the handy people the agencies have on their books to do basic maintenance, will do the work for you at very reasonable rates so that’s a plus.

    We have had a difficult tenant we had to deal with directly but we survived it and it was an invaluable learning curve and haven’t gone to an agent since.

    We haven’t had a vacancy in our properties as we are really proactive in advertising if a tenant is deciding to leave (we do some room rentals). I find agents don’t have the same sense of urgency as you do.

    But that’s just us.

    Profile photo of Kristin Simondson PBREKristin Simondson PBRE
    Member
    @kristin-simondson-pbre
    Join Date: 2012
    Post Count: 86

    You can absolutely get an agent involved to lease the property. We've done this at our office and we still put as much effort in leasing as we would if we were to manage the property – because the way I see it one day that owner may go overseas or decide to go with an agent so why would we give them bad service?

    Also this business is based on reputation so find an agent with a good one and approach them about taking care of the leasing process.

    Leasing can be time consuming and recently I've been approached by many landlords to take over management because of difficulty in leasing. Without the expertise to property screen tenants we've also seen a huge jump in private landlords unknowingly leasing to problem tenants.

    Profile photo of WomeninPropMelbWomeninPropMelb
    Member
    @womeninpropmelb
    Join Date: 2008
    Post Count: 234

    Bizziegirl good on you. You seem to have it all under control.
    Kristin… you are so right too. It is hard to find a good agent to look after your property but when you find a good one- that are GOLD GOLD GOLD!
    For me- you dont buy a car and do the service yourself- get someone who knows.
    IN sales too- people think- oh thats easy but its not as easy as it looks and you dont build up a book of tenants and/or buyers overnight or of the back of one sale.
    it is important to look after your tenants. That is why I went into real estate- I had a dodgy agent (not) looking after me. Then when I bought my house and my Investment property – do you think he got a look in? Has he ever since? NOOOOOO!
    Look after your tenants and they look after your house- whether by private rental or via an agent. BEST ADVICE………….

    Profile photo of renelrenel
    Member
    @renel
    Join Date: 2012
    Post Count: 40

    I put an ad on gumtree and had 12 responses in a couple hours. Its been a day now and its 20+!

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