How Much Do Rental Agents Cost And What You Get For That Price?
The keys to your new investment property are in your hand. How to get the best returns for your investment? Finding a tenant to generate rental income is key.
What should you consider when selecting a rental agent for your investment property?
You will pay a letting fee to a rental agent for sourcing a tenant for your property. The letting fee is likely to start at one week’s rent and varies tremendously from one agent to another. It is a poor decision to choose based solely on their cost. A cheap agent may provide a poor service resulting in less income for you.
- Value for money
Ultimately, you want to maximise the income from your investment property. The only source of income will be the rent paid by a tenant. A professional rental agent can boost income potential by identifying the perfect, reliable, tenant for your property and suggesting improvements to increase the appeal or rental value of the property.
This article looks at some of the services you should expect from a professional rental agent.
How much should the rent be?
As a private landlord, there are no limits to the amount of money you can ask tenants to pay as rent. The goal is like any other business: maximising profit and minimising risk. It may be tempting to make the price too high, pricing yourself out of the market. Alternatively, you may ask for too little rent, not getting the full potential from the property.
A real estate agent should have knowledge about which markets could support more affordable rates due to their proximity to transport hubs, for example, as well as how desirable different types of housing might be depending on location. They can advise on the current market rate and the best likely rent for your property.
Advertising the property
Advertising for a tenant for your property may be difficult because it is unknown territory for you. However, there are ways to make the search less strenuous and more fruitful as well! You can ask friends or family if they know of anyone looking for available properties. Facebook Marketplace often has posts with potential tenants and rentals available. Browsing these listings, or advertising there could also help find potential renters. Try placing an advertisement in the small ads section of your local newspaper.
There is a whole industry designing content for advertisements. If you are going it alone, look at successful adverts for similar properties to yours. See the wording, how much of a description to include. Are there photographs?
Instead of spending hours and hours scouring classified ads and searching the Internet, a rental agent will do this for you, saving you a lot of time. A professional agent will have template advertising flyers or a website displaying properties available to rent. They may already have a list of potential tenants seeking properties on their books.
A professional established rental agent will have a database of potential tenants and could potentially lease without advertising!
Screening of applicants
Screening potential tenants can be difficult for private landlords. It seems simple to trust your instincts if you get on well with a potential tenant, but a screening process is important.
A good real estate agent will ask for documentation to indicate the tenant earns enough money and is trustworthy before they sign off on them as your newest renter. This could be something like payslips from recent jobs or bank statements showing steady income over time suggesting that the tenant could afford to pay the rent for the duration of the lease. References from past landlords or employers will help to provide assurance the tenant is of good character and will care for your property.
This process aims to guarantee an investment income for you while also protecting the long-term value of your property.
The lease agreement
The lease agreement makes up your contract with the tenant. It should specify how much you will charge them and when it must be paid. You should call out when rent reviews will take place. The contract also describes the term of the lease and what happens if they wish to leave before their term expires.
The lease agreement will confirm the details of the security bond. You must specify exactly how much the bond is and under which conditions you may refuse to repay part of (or all) the deposit.
The lease agreement must be watertight! It is a legally binding document that helps guarantee your investment income. Once signed by the tenant and the landlord, the lease, and any related documentation are subject to the NSW Government’s Residential Tenancies Act. The Act details the legal obligations of the landlord and tenant and lists mandatory inclusions for the lease agreement.
An experienced rental agent will have drawn up many lease agreements before. They will have standard templates with the normal inclusions, as discussed, above. It is highly recommended that an expert produces this vital contract for you.
Let’s Rent – A better way to rent
Let’s Rent will handle the whole process for you. Our friendly value for money approach is designed to get you the best possible tenant paying market-rate rent.
We will conduct a rent appraisal, free of charge, whether you decide to partner with us or not. We advertise your property on our own listings, which are often the first point of contact for tenants seeking rental properties.
Many of our team are property investors and we understand how important tenant screening can be. We obtain documented proof of ability to pay the rent and obtain references to help ascertain good character.
Our lease agreements always confirm that rent must be paid by direct debit and we have zero tolerance for arrears. This means the tenant won’t forget to pay and helps generate reliable income for you.
Why not find out, today, what your property income should be. Contact the friendly team at Let’s Rent to arrange a free rent appraisal.