The process of renting or leasing a home to a renter… that’s “Tenant Placement”. Seems fairly simple, but there’s actually a lot that goes into it. If you’re a renter, you’ll want to read this so you know the different roles available. If you’re a homeowner, you’ll want to know the differences between using a Property Manager or a Realtor if you plan on hiring someone to do the job for you… unless you intend to do it yourself, in which case you REALLY need to read this.
The End of the Beginning
Tenant Placement is the finalization of many steps taken to sign a lease or rental agreement on a property for rent, whether it be commercial or residential. Tenant Placement essentially begins at the very start of the life of a rental property. It begins with your initial preparations into making a home a rental, including such things as deciding to re-paint, re-carpet, remodel… or not. It begins with your choice, or not, of upgrading, improving, and/or deferring repairs that may need to be made, not just to help the property operate smoothly, but to also be attractive to a broad audience.
The Home Has A Job Too
So it’s important to know what role the home plays in Tenant Placement. If you own an ugly home, it’s probably not going to attract the best crowd. If it’s attractive, clean, and well maintained, you’re going to attract an entirely different quality of tenant. Attraction is the first step in Tenant Placement. This also includes the photography. Some homes for rent are advertised with photos taken from someone’s iPhone, while others use quality professional photography. It’s important that pictures show the home in its best possible light, but make sure the photos show the good and the bad. If your home has a “problem”, it’s best to announce it up front and avoid wasting time showing a home repeatedly if it’s got a problem that turns off everyone who walks in.
Who Answers the Phone?
So once the home is ready and the ads are posted, if you’re a renter calling on the property, you’ll probably be dealing with one, or all, of three different people: that would be (1) the Owner, (2) the Property Manager, or (3) a REALTOR. If you’re dealing with the owner, it’s probably likely the owner will be self-managing the property, providing his own application, and not using the services of a professional manager or Realtor. If it’s a Property Manager, they will probably be managing the home and are frequently in complete charge of placing the tenant, including providing and screening any applications. If it’s a Realtor, they’ll probably be responsible for showing the home only, and any application would be provided by the Owner or Property Manager.
More times than they realize, owners who directly rent their home cut corners and do not perform a thorough tenant qualification. This can be good for any renter with a bad mark in their history that they want to hide, but it’s not uncommon for many landlords to unknowingly expose themselves of risk of all kinds without knowing it anyway. Any landlord who does not fully understand real estate law and Fair Housing law can be a walking target for a lawsuit. They are the most frequent violators, though perhaps unintentional, of the law and most likely to make an expensive mistake, landing themselves in court, or experiencing one of the “horror stories” that most people have heard about.
Property Management Benefits
A professional Property Manager is most likely to provide the best overall rental experience, from the application and qualification process, to handling repairs or routine maintenance, all the way to completing the move-out process when you finally leave. Better property managers will have more connections with repair personnel, knowledge on the laws, Fair Housing, and security deposit handling and refund procedures. An excellent Property Manager is going to also work more exclusively for owners who “trust” the manager to make all repair decisions without the owner’s prior approval. When a Property Manager has the owner’s trust to make important decisions quickly, repairs get handled diligently and promptly, and that makes for a happy tenant. The downside to working with a property manager is that he or she may only show you rentals that exist within their own inventory of homes, and not everything on the greater market. For this, you would use the service of a Realtor.
Using a REALTOR
A Realtor, unless he or she has special approval, generally does not “manage” rentals, but occasionally will “show” them. Certain owners use the services of a Realtor (or even some Property Managers) to post his or her home for rent in the Realtor MLS for “tenant placement only”. Their reason for doing it this way is because many top national real estate websites, such as Zillow, pull their data directly from the MLS. By having a Realtor list a home “for rent” in the MLS, it will ultimately get greater exposure than a home that doesn’t. The advantage of looking for rentals with a Realtor is that they can typically show you just about any home for rent on the market. They may get disgruntled of you ask to see a place that doesn’t pay much of a commission (since Realtors are typically “commission driven), but that’s their problem. The disadvantage to using a Realtor is that he or she will have limited authority in the transaction. Realtors’ typically act as “agents” on behalf of a Renter, an Owner, or a Property Manager; so when using a Realtor, you are typically only using someone to help you “open the door”. Once you submit your application, the Owner or Property Manager will usually take over from there.
Which is Best?
There is nothing particular wrong with using any or all of the three to find your next rental home. In fact, in some markets it might actually be necessary. But regardless of who shows you the home, you should concern yourself with the home’s long-term management more than anything else. Whoever manages the home will determine the rental experience you have. There are pro’s and con’s to renting from a Home Owner vs Professional Manager. When you get ready to rent your next home, know what you’re looking for, use the services of professionals where necessary, and remember the benefits of renting directly from a property manager. If you have questions about renting or being a landlord, contact us today!