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How Much Do Leasing Agents Get Paid – In the real estate investment world, the definitions and roles of real estate agents and leasing agents are often confused or assumed to be the same. However, there is a distinct difference between the two, and as an investor, it is important to gain a good understanding of what they all entail.
In this post, we look at the difference between a letting agent and a property manager, so you can decide which one works best for you.
How Much Do Leasing Agents Get Paid
Property managers and leasing agents have different roles. The rental agent shows who can rent the buildings and houses listed for rent, and among them is related to sales. Their sole purpose is to enable the tenant to occupy the property.
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Ideally, the property manager handles EVERYTHING about the property, even after the property has been successfully rented. While the property manager is concerned with renting the property quickly, they also ensure that the tenants feel happy about their new place and live comfortably. Property managers also address concerns that a tenant may have on behalf of the property owner. These concerns include, but are not limited to, minor maintenance and ensuring that all facilities are in working order.
Generally, a property manager covers all of the duties of a leasing agent, but a leasing agent only covers some of the many duties filled by a property manager. As a property owner, it is important to know that not all rental agents are created equal, and that many issues faced by property owners can be completely avoided by using a knowledgeable and experienced rental agent. While rental agents may be concerned with earning a commission from renting a property, leaving the landlord to deal with any issues from newly found tenants, property managers are responsible for the property even after the property has been successfully rented.
The property manager is paid a monthly fee for each property they manage, while the tenant’s agent is paid a commission for each property rented.
The first consideration when choosing between a property manager and a leasing agent is your goal. A rental agent can be useful if your main concern is renting out your home, and you intend to manage the property directly after new tenants are placed. For investors looking for a full-service solution, a wealth manager may be a better bet. A property management company can not only help in renting the property but also in the day-to-day operations.
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Our recommendation would be to use a property management company to assist in renting out your property, even if you intend to manage your property directly. By using a property manager to fill your position, you can use the property manager’s experience to avoid the common pitfalls of the rental process and you can target the best tenants for your property.
Working with an experienced and knowledgeable property manager can make all the difference in the world. With a professional property manager by your side, you can trust that the day-to-day tasks of managing your rental property are in good hands and see the difference a professional can make.
At California Realty Group, we are full-service real estate managers serving the Temecula, CA, area. Contact us today for more information about our listing or property management services! Most homeowners have a real estate position in their portfolio. But adding some real estate investments can help you diversify your portfolio and protect you from the stock market. Let’s look at your real estate investment options, the pros and cons, and how to get started.
Rental properties are the most-there option in this list. You buy a piece of residential property and rent it out to tenants. Most rental properties are rented for 12 months, but short-term rentals through companies such as Airbnb (NASDAQ:ABNB) are becoming increasingly popular as well.
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As a landlord, you own the property. You are responsible for maintenance, cleaning between tenants, major repairs, and paying property taxes. Depending on the terms of the lease, you may be on the hook for replacing equipment and paying for utilities.
You make money from rental properties from the rental income you receive from tenants and the appreciation price if you sell the property for more than you paid.
You can also benefit from tax write-off. Under the employment loss rules, you can deduct up to $25,000 of your rental loss from your regular income if your adjusted gross income is $100,000 or less. Depreciation (free money) and interest (which you pay no matter what), can cause the house to show an accounting loss even if you are still making money.
When you buy a rental property, you may need a down payment of up to 25%. But if you charge enough rent to cover your mortgage payment, you’ll get the rest covered by your rent, plus any interest costs.
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If you don’t want to put up with the headache of managing a rental property or can’t come up with a 25% down payment, real estate investment trusts (REITs) are an easy way to start investing in real estate. REITs are publicly traded trusts that own and manage rental properties. They can have anything: medical office space, retail, industrial real estate, and office or apartment buildings, just to name a few.
REITs tend to have high dividend payouts because they must pay out up to 90% of their net income to investors. If the REIT meets these requirements, it will not have to pay corporate taxes.
Additionally, while selling a rental property can take months and mountains of paperwork, REITs have the advantage of being less expensive since they sell on stocks.
Investing in a real estate investment trust (REIG) is another way to secure the profit potential of private rental properties while potentially earning higher returns than REIT transactions.
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REIGs buy and manage real estate and then sell shares of the real estate to investors. A REIG will buy something like an apartment building, and investors can buy units in it.
The operating company keeps a portion of the rent and manages the property. This means that the company gets new tenants and takes care of all the maintenance. Often, investors will include additional rent to continue paying the loan and meet other obligations or other vacant units.
Flipping houses is the most difficult and risky of these options, but it can be very profitable. The two most common ways to flip houses are to buy, fix, and sell, or buy, hold, and sell. In any case, the key is to keep your initial investment low and keep maintenance costs low.
Let’s say you can buy a house for $250,000 with 20% down, or $50,000. You do another $50,000 in repairs and then list the house for $400,000. You use $400,000 for the down payment. $200,000 in debt and then make $100,000 in profit on a $100,000 investment. It’s a great return if you can get it.
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The problem is that you often can’t. The housing market is not known for volatility, but when it’s pushed to the limit – as it should be – it kills you in the housing game. Keeping renovation costs to a minimum may sound easy, but it can be impossible if you don’t have direct construction experience.
As of 2021, commodity prices are through the roof, there is a labor shortage everywhere, and there are almost no homes for sale on the cheap. That’s the worst part of the real estate cycle: Everything is expensive, and the market can turn at any minute.
If you decide to flip houses, be smart and find a way to get them out when the market gets too hot. It may seem counterintuitive, but it will save you money in the long run.
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Real estate limited partnerships (RELPs) are a type of REIG. RELPs are designed similarly to hedge funds, where there are limited partners (investors) and a general partner (manager). The general partner is usually a real estate business that takes all the responsibility.
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RELPs are passive investments in real estate. Typically, a general partner establishes a partnership and recruits investors to become limited partners. Investors will receive a K-1 to report income on their taxes, but they don’t have much leverage in the process.
RELPs can be profitable if you find a great partner. But you are fully relying on the main partner who should, without much attention, manage the property and honestly tell you about the finances.
Real estate funds invest in REITs and real estate operating companies (REOCs). REOCs are similar to REITs, but they don’t have to pay dividends, so they grow faster.
Real estate mutual funds or exchange-traded funds (ETFs) are the easiest ways to invest in real estate. You allow a manager or even an index to choose the best real estate investment while you collect dividends.
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Even if you are an individual investor, consider using
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