Real Estate Agents Quoting Potential Rent in Your Listings? Let's Be CAREFUL!

By
Property Manager with Gibson Management Group, Ltd.
https://activerain.com/droplet/kXM

I'm beginning to see real estate agents listing rental or investment properties FOR SALE.....WITH POTENTIAL RENT in the blog title.


I frequently get calls from appraisers on the rent potential of a home they are appraising.  I offer to give them a WAG BASED on my 45+ years of experience * WHAT I am getting in rent for similar units * AND after I have reviewed the property on MLS.....I'll spend 15 to 30 minutes reviewing the listing and doing some checking on comps in Craigslist AND on other property manager websites.

My LARGERS PLUS is that I may well have a comparable unit - similar size, #of BRS,  same school system in my portfolio THAT IS ALREADY RENTED.

If you are marketing to local investors, THEY will KNOW the rent WITH or WITHOUT ceiling fans and washer and dryer, they will know where their potential renter is employed AND if there is a nearby bus line. 

...so if you are going to quote a POTENTIAL rent for a property FOR SALE, have some back up or some BASIS other than what the monthly carrying costs may be with PITI that need to be covered.  

....and let's be CAREFUL out there

Posted by

Wallace S. Gibson is a Certified Property Manager with over 50 years of property management experience and expertise.  She maintains a specialized property management business in Central Virginia serving Albemarle, Greene, Fluvanna and Louisa counties  

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Rainer
243,805
JOSH EVANS *JoshEvansHomes 516-655-5000
Village Properties of Mineola, LLC - Mineola, NY
I dont do rentals. Not enough money in it. Good luck. Good blob
Oct 07, 2011 12:52 AM #1
Rainmaker
686,759
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Wallace: Excellent advise. If it's an investment property, I quote what rents have actually been received for that property. Sometimes I quote POTENTIAL rent slightly higher because the current renter is getting a slight discount since the property is on the market and he has to allow us access to show. I don't normally do rentals either, but if there are tenants in the listing, you have to deal with them.

Oct 07, 2011 01:00 AM #2
Rainmaker
1,245,223
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

DIY landlords often quote what they NEED to get to cover their costs and their property sits vacant and the LOO$E 

Agents quoting a potential rent to get an investment property SOLD are asking for trouble if the buyer can't get that income!

 

Oct 07, 2011 01:07 AM #3
Rainer
205,520
Mark Delgado
houses for rent, Solano County & Glen Cove - Benicia, CA
Benicia and Vallejo, Property Management, rental h

Wallace,

I couldn't agree with you more.  I see folks coming into our office that have been quoted rental rates that are all over the board.  Guess who quoted the rates?  A Realtor.  I even wrote a blog about it recently: Realtors, are you really qualified?

Oct 07, 2011 01:24 AM #4
Rainmaker
1,245,223
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

I know it is HARD to RESIST this especially since RENTERS are the FORMER homeowners; however, this will get loads of agents in HOT WATER if they don't know the rental market for their area and have BACK UP for their rental quotes * Zillow rent ZESTIMATES do not count!

Oct 07, 2011 01:42 AM #5
Rainmaker
421,084
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

Wallace, 

I am still chuckling at the first comment, "there is no money in rentals".  

Knowing your business and what you are capable of quoting or not is key.  We routinely surprise folks with rental rates - on the high side, as we know what the true market value is.  I had a neighborhood sales expert call me about a rental I had listed. She said she had very qualified buyers IF I would just get the rent to a cheaper more reasonable level - she could rent it out.  It was a pleasure to tell her we had just gotten signed lease paperwork and deposits on a FULL PRICE rental!

All the best, Michelle

Oct 07, 2011 01:42 AM #6
Rainmaker
1,245,223
Wallace S. Gibson, CPM
Gibson Management Group, Ltd. - Charlottesville, VA
LandlordWhisperer

Michelle * I chuckled also....property management has been BERRY, BERRY GOOD to me...keeps me in Talbots and Pink Palm and my dogs in TREATS!

Those agents getting into the PM biz NOW have an uphill climb against other agents; however, those of US with listings, systems AND referrals are still doing well....I'm on the hunt for GOOD quality rental homes for the demand in our area!

Oct 07, 2011 02:01 AM #7
Rainer
246,375
Daniel H. Fisher
www.FisherHermanRealty.com (704) 617-3544 - Charlotte, NC
MCRP - Charlotte Real Estate, NC or SC

When it comes to discussing rents with an investor client, we collaborate with a local agent who handles rentals full time.  They often get the property management business.

Oct 07, 2011 02:31 AM #8
Rainmaker
459,273
Kim Boekholder Utah Real Estate
Results Real Estate 801.580.5624 - Draper, UT
Broker, Results Real Estate

I agree the agents are on a slippery slope when they start quoting rents.   Its best to refer your sellers to a property management company and work together on the listing.  I have a company that I work with.  I work on selling it and if the time comes to renting the home out the property management company then takes over in the area they are experts in.  You need a team

Oct 07, 2011 05:00 AM #9
Rainmaker
2,706,801
Lisa Von Domek
Lisa Von Domek Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Great warning, Wallace...a slip of the lip (or print)  So many agents are delving into investment properties without enough knowledge to protect themselves and their clients.  Education is key...if you don't want to invest the time in learning a specialty, stay away from it!

Oct 07, 2011 05:00 AM #10
Rainmaker
1,041,881
Charles McDonald
Charlottesville Real Estate Solutions - Charlottesville, VA
REALTOR®, Blogger, Principal Broker®, Owner

good advice. Seems like with a lot of things some agents try to do everything and every type of transaction.

It pays for agents to focus

Best regards, Charles

 

Oct 07, 2011 10:37 AM #11
Rainmaker
780,396
Kasey & John Boles
Jon Gosche Real Estate, LLC - BoiseMeridianRealEstate.com - Boise, ID
Boise & Meridian, ID Ada/Canyon/Gem/Boise Counties

I think it's dangerous - what if a buyer purchases the house based on the potential rents that we give on the MLS and then it is too high?  Liability...we typically do put "current rents" though if it is already occupied.  I don't know enough about rents anyway, I'd need a property manager involved. -Kasey

Oct 07, 2011 07:11 PM #12
Rainer
1,756,848
Conrad Allen
Re/Max Professional Associates - Webster, MA
Webster, Ma, Realtor

Hi Wallace - The rental market is like all fields.  You got to know what you are doing.  Know your market.

Oct 07, 2011 11:37 PM #13
Ambassador
628,392
Jeanean Gendron
The Address Realty - Redding, CA
Specializing in Selling Unique Properties

Wallace, a sticky issue for sure. Always a careful analysis with a Property Management Company based on past rents. When that data is not available....it is critical to have a PMC that will know the rental market and can advise the client. I so agree with you on the delicate nature of the issue....that hypothetical initially only to be qualified by the PMC. I do investment analysis for Investor...but always say projected until verified by PMC. Great post. Have a great day!

Oct 08, 2011 02:01 AM #14
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