Where Did the Quality Renters Go?
by Robert Griswold
Q: I have been a landlord for many years and have always been quite successful with simply placing a rental sign in front of my property when there is a vacancy. However, the economy in my area is getting worse and I have had one rental house vacant now for more than three months. It’s tough to have to pay the mortgage each month without rent coming in for this property.
A: One of the recent trends in rental real estate is the emergence of firms that assist tenants in locating rental units. These services are available in virtually every major metropolitan area. Some offer their services for no charge to the renter and are compensated by the landlord or the property manager when the prospect signs a rental agreement.
Other rental locator firms charge tenants for their services and are compensated only when they find a rental unit that meets the needs of the renter. These are often companies that work with employers who are relocating employees to the area for high-profile jobs. With the current economic downturn and likely an overall reduction in relocating employees, it may be more difficult to find leasing agencies that are paid by an employer.
Although most owners of single-family, condo, or even small- to medium-size multifamily rental properties do not need the services of a leasing agency, there are some definite advantages to consider.
Leasing agencies that get paid by the landlord or property manager are likely to have close working relationships with major corporations and relocation services and have excellent tenants looking for rentals.
These tenants relocating into an area typically do not have the time to search for a rental property and want the leasing agency to handle matters for them. They also are not often candidates for purchasing a home, because they will be staying only for a specific assignment or because they want to rent in the area before making a purchase decision.
However, there is often a trade-off with these renters: They are usually very well qualified, but they are not as likely to rent long term. The reality is that not all tenants will stay for a long period of time anyway, and if you know that the tenant will be with you for only a set period (such as a one-year lease) you can adjust the rental rate to reflect this rental term.
E-mail your questions to Rental Q&A at [email protected].
Questions should be brief and cannot be answered individually.