Finding a place to live is challenging, especially for first-time renters.
You have to search for homes with your preferred amenities, schedule inspections, attend interviews with the landlord and finalize the lease.
The entire process can be overwhelming and confusing.
Hiring a rental broker can be a suitable alternative and help you speed up the process.
The broker acts as a bridge between you and your prospective landlords, helping you identify the best rental properties in the neighborhood of your choice.
However, there are both pros and cons to using a rental broker.
Pros and cons of using a broker to find a place to rent
Pros of using a rental broker
- They have a huge database of rental properties – Rental brokers are professionals who work with landlords and building managers. They have access to properties that are not listed on rental websites and also new houses that are about to get listed. You just have to tell them your requirements and preferences in terms of location, amenities, etc. to get a list of rental houses that fit the bill.
- They can help you find rental homes on short notice – Finding the best rental home takes a lot of time and effort if you have to complete the entire process on your own. Rental brokers, on the other hand, have extensive knowledge of the real estate market and can help you find a suitable home within a short duration.
- You can rent a home in faraway locations – Searching for rental homes in a new city can be painstakingly difficult, especially if you do not have knowledge about the local real estate market. There are chances of falling prey to scams and fraud if you try to rent houses in a new city through the internet. Working with a reputed rental broker will help you find the right home in your preferred location and within your budget.
- They can help you find the perfect rental home if you have special needs – Finding a rental home that suits your special needs can be tiring. For example, if you need a home that allows service animals or a home that is disabled-friendly, etc. Rental brokers have a vast database of all types of houses and can find the perfect house that suits your special needs.
- They can help people with low credit scores find a rental home – Some landlords are very particular about the tenant’s credit score. They demand higher security deposits if your credit score does not match their selection criterion. A rental broker can help you to find landlords who are not particular about the credit score and are considerate. You can easily find a rental home even if your credit score is low.
- They manage paperwork – Applying for a rental house, signing the lease, and finally moving into the home requires a lot of paperwork. A rental broker is an expert in the field and has proper knowledge of the paperwork. They can help you during the entire process and protect you from scams.
Cons of using a rental broker
- Increased costs – There are too many costs in the first month of renting. You have to pay the rent, security deposit, last month’s rent, moving-in fees, insurance, etc. The rental broker’ fees can be an extra burden.
- Conflict of interest – Rental brokers work closely with landlords, property agents, and building managers. They may sometimes collide with scheming landlords and compel you to rent a damaged or faulty house.
- Limited collection of properties – With the growing popularity of online websites for rental listings, fewer landlords are working with rental brokers. This may result in the brokers having a limited collection of rental homes. It is always advisable to work with reputed and experienced brokers, who have a good understanding of the rental properties and a vast database of homes.
- They work with too many clients – Rental brokers work with many clients at a single time point. They may show the same properties to multiple clients and end up giving it to the client that takes a quick decision. If you are not fast enough, you may end up losing your dream rental home to other home seekers. They may also increase the rent if too many prospective tenants are vying for the same rental home.
- Exclusivity agreements – If the broker has an exclusivity agreement, you cannot find homes in any other way other than the broker. This will limit your options as you have to choose from the collection presented by the broker.
Is hiring a broker worth it?
There are both pros and cons to hiring a rental broker. While hiring a rental broker helps you to save time and find the best properties in the neighborhood, the broker’s fees can add up to the expenses.
You have to consider various factors such as the time available to find the rental property, your knowledge of the real estate market, the destination where you are looking for a home, and your budget.
Hiring a rental broker is good if you are a first-time renter without much knowledge of the real estate market, if you are in a hurry to find a home for rent, if you have to find a house in a new city or country, or if you have to find a property with special amenities.
How to find the best rental broker?
Finding the right rental broker, who is easy to communicate with and understands your requirements.
Here are some tips to find the perfect rental brokers.
- Understand your needs – The first step is to understand your needs – what type of house you are looking for, what is the time frame, how much you are willing to spend, etc. Understanding your requirements will help you to choose the brokers who provide those services.
- Ask for recommendations – One of the best methods to find a perfect rental broker is to ask for recommendations from family and friends. They can share first-hand experiences with various brokers and can help you choose the right one.
- Read reviews – Once you have a list of a few rental brokers, visit their websites and read customer reviews. This will help you to know the experiences of other customers and the working style of the broker.
- Schedule an appointment – You can schedule to meet a few rental brokers to know more about them. You can know the working style of the broker, his charges, success rate, etc. by meeting and interacting with the prospective rental broker.
- Hire the right broker – After meeting the broker a couple of times and interviewing them, you can choose the broker that suits your requirements. Once you finalize the broker, negotiate the prices and finish the paperwork.
- Sign the brokerage agreement – the final step is to sign the rental brokerage agreement. Read the terms of the agreement carefully before signing it to safeguard your interests. Eg: Some brokers have an exclusivity clause, which will limit your options of finding a rental home through other means, while others may lure you with no brokerage and charge other fees in lieu of brokerage.
What is a rental brokerage agreement?
A rental brokerage agreement is between a rental broker and a prospective tenant.
The agreement is written by the broker and highlights the services provided by the broker and the fees charged.
The agreement serves as a reference point in case of a dispute between the broker and the tenant.
The rental brokerage agreement includes
- The name, license, address, and other details of the broker
- The name and details of the client
- The term of the agreement (starting date and ending date)
- Details of brokerage and other fees
- Details of the services to be provided
How much is the broker fee for rental? Who pays the broker fee when renting?
Rental brokers charge anywhere between 15 days to 2 months of rent as fees.
Sometimes they charge fees as a percentage of the annual rent, which varies from 8% to 15%, depending on the city, neighborhood, and market conditions.
The broker usually charges fees from the tenant. Sometimes, the landlord pays the broker’s fees, while some brokers charge fees from both the tenant and the landlord.
Rental brokers act as middlemen between the landlords and the tenants. They help tenants to find rental homes with their preferred amenities and complete the paperwork to smoothen the renting process.
There are both pros and cons to working with rental brokers. Rental brokers charge fees for their service. The fee is usually a month’s rent and varies depending on the city, neighborhood, and market factors.
It is important to work with genuine and experienced rental brokers to ensure that you get the best rental property.
Ask for recommendations from friends and family, read reviews and choose the right broker that suits your preferences.
Once you finalize the broker, sign the rental brokerage agreement to complete the process and allow your broker to find your dream rental home.
