Where did the quality renters go?
Leasing agencies deliver, but costs may not pencil out
By Robert Griswold, Friday, February 12, 2010.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 local Realtor has seen my sign for so long that she keeps calling me and encouraging me to sell the property. But the sales market is so soft that almost all of my equity is gone and I don't want to give it away.
I spoke with another landlord recently who told me that he's also had more trouble than usual but has begun using leasing agencies that specialize in matching up tenants with landlords. I checked out the company he recommended and they charge a full month's rent to place a tenant in my property. That seems like a lot, but I don't seem to be able to generate any good prospective tenants on my own. Do you have any thoughts about leasing agencies?
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. ...CONTINUED
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Submitted by Mia Melle on February 12, 2010 - 7:42am.
As far as leasing companies go, I have found that most of them are highly ineffective and in my area of Southern California, most of them have gone out of business completely. These companies which were primarily very low end "mom and pop" operations charge potential tenants $100 or more for a photocopied list of recycled listings they copy from the newspaper, MLS or internet, most of which the tenants could have found for free if they just looked. Many of the listings are out of date and inaccurate. They then say they will help the tenant put together their rental application to present to the landlord or property manager but it's totally unnecessary and a waste of time because most companies require information on thier own applications and need to pull their own credit reports anyway. Often clients are upset when they find out they need to pay again after they've already paid the leasing company.
In addition, property managers should never use thses services because finding tenants is part of thier job! If a property management company is using a leasing service, there is definitely something wrong with thier company.
I'm a broker for a property management firm located in Southern California and we have 3 or 4 times more tenants than we have properties. There is definitley no shortage of tenants and many of them are very qualified. Due to the economy, you cannot judge credit like you used to 3 or 4 years ago. We have no FICO requirements as we work with many tenants coming out of foreclosure or bankruptcy and their FICO's may be in the 400's but that has no bearing on thier quality as a tenant. Income is the most important factor these days and that's what property owners should concentrate on if they are doing their own qualifications.
Instead of trying to use a leasing company, I highly recommend property owners using a property management company like Renttoday.us who will take care of all their marketing, advertising, and locating a tenant in a much quicker fashion than on their own or through 3rd party companies. A property management firm has to work with both the property owner and the tenant throughout the tenancy and become more accountable to choose a qualified candidate. Our firm recieves management fees from rent collected only so it does not behoove us to place a tenant in the property who may not pay because that means we will not get paid so we have a direct interest in the quality of tenant we choose.
Mia Melle, Broker & President
West Coast Property Specialists, Inc. / Renttoday.us
www.renttoday.us
Submitted by Ken Stewart on March 11, 2011 - 12:00am.
After reading all the customer (landlord) reviews and the residential lease terms for a site called renttoday.us, I believe I can safely say where the quality renters went: As far and as fast away as they can from businesses of this caliber. I suppose that if one doesn't mind paying for maintaining everything inside and outside of a domicile they don't own, then their lease agreement is perfectly suitable for most renters. The lease in no way takes into account any convienence or cost with regard to the renter. Just reading the lease can set the blood to boil. For example, in paragraph 1.PROPERTY: sub paragraph C.:
"Certain items may have been left in the home and Landlord does not guarantee or warrantee the condition in any way. Such items may include, but not limited to Washing Machine , Clothes Dryer , Refrigerator , Microwave , Lawn Mower , or miscellaneous Furniture which are considered “personal property” of the owner and will not be maintained by Owner. Please refer to your Master Lease Page for a list of such known items."
As one of the many conditions that this agreement asserts I find it altogether disturbing the complete lack of responsibility that this least entails dispite the fact that many of (if not all) the features of rental properties are used as selling points. Maybe I'm naive or something but if I rent a room (for example) whether it be for a day, week, or month, I'm not expected to clean/maintain the grounds, fix the plumbing if/when necessary, or maintain it in any way other than not thrashing it. And if I decide I want to extend my stay, I'm not locked with just two forms of payment and I don't have to drive the payment to some office because I have to send a certified check or money order otherwise.
On top of everything else, when I go to look at a property, I could very well be in "competition" with other people at the same viewing and the "most qualified" applicant will be given the keys. That is after they remit the first months rent and a security deposit that could be diminished by any necessary repairs - including one of the not guaranteed/warrantied items that are considered "personal property" that "may" have been left by the landlord. I guess if someone rented a property and elected to take the appliances with them, the landlord may or may not be out money for them. Again, maybe I'm naive.