Can I hire someone to get tenants in but not manage properties?

Question

Hi all,

We have been looking into managing rental properties on our own and currently have a property manager with one home and are self-managing the other home. We've got the management software and maintenance requests set up to proceed with self-managing but getting a new tenant in is challenging and time consuming to plan around with our our W2 jobs.

We want to know if there is a such a role where a hired person posts listings of a property, screens applicants, selects an appropriate tenant, gets them moved in and then bows out of the transaction with the owner managing from there forward. We have jobs that make it difficult to get a renter in but its completely manageable for us to schedule the maintenance and repairs as needed once a tenant is living in a property.

We just want to know if that job exists and where we could find someone to do the heavy lifting of getting a tenant into the home for a one-time fee.

Thanks in advance!!!

Anna Sagatelova · Answer

I gotta take issue with this... real estate and property management is a profession. We as professionals don't think "oh here's someone who we can swindle, let's not use the procedures and expertise we have and approve whoever walks through the door first!"

Do you think this way about every profession? Because there are many professionals you deal with on a daily basis for just a single transaction. But it's always PMs and agents that get this "but are your interests aligned" treatment.

Yes, our interests are aligned. If I am agreeing to take on a client, whether it is for full service property management or a one time leasing only transaction, I hope to earn a repeat client. I hope they buy more properties and have me lease more of them. I hope that eventually when they do want to outsource to full-time management, I'm the first person they think of. And in the meantime, I hope that they refer me to other investors.

Kyle J. · Answer

@Gloria A.  I'm sure you can find someone to do this, but the question you need to ask yourself is, would that be a good idea?

I've found screening, selecting and placing tenants to be the most important part of my success as a landlord.  (Most of my tenants have been with me for years, I've never had to do a single eviction, and all of my tenants are paying on time...even the ones who have been out of work since the Coronavirus started, if that tells you anything.)

I can't help but wonder, how much incentive would someone have to find you the best/most qualified tenant if all they had to do to get paid was find and place someone in the property? Because after that, if that person turns out to be a problem, it's not their problem since they get to "bow out" and don't have to deal with any of the day-to-day management of the property.

My point is, it just seems like your interests wouldn't be aligned very well.  Just something to think about.

Dell J. · Answer

In my area real estate agents provide this service as well.  They usually charge the first months rent or half of the first months rent.

Ali Boone · Answer

Most PM companies will offer to just get the tenants. It's easy money for them and pays way more than the monthly management anyways. I would ask your current property manager if they offer it (if it's in the same area). If they don't, just call a PM company like you normally would and ask if they offer it. Just be sure you work with a good one-- finding a good tenant is MAJORLY important. Don't get just any PM who will throw just anybody in there.

Drew Sygit · Answer

@Gloria A. Trusting someone to do a proper job of screening applicants is the real challenge here. An agent or PMC can handle the showings and get applications.

In our experience 90%+ of agents do a TERRIBLE job of screening applicants! Most have no idea of what to do and ask other agents in their office for advice, which makes it all a crapshoot. A bad agent could just place a tenant for the commission.A PMC has more experience iwth screening applicants, but you'd still want to be sure to understand their screening process before trusting them to find you a good tenant. A bad PMC could just place a tenant for the commission.

Another option is to hire an agent or PMC to handle the showings and applications, then you step in to do the screening - which can be easily scheduled around your W-2 jobs.

Anna Sagatelova · Answer

@Kyle J. I always appreciate the perspective of investors who successfully self manage. But @Gloria A. is right, it is a time consuming process to market and show and properly screen applicants. And it's a process that leaves the door wide open for liability in discrimination and fair housing complaints if not done right.

Unfortunately, we all see the forum threads on here about people who advertised their property without identifying their screening criteria first or educating themselves on federal and state fair housing. Most investors don't have the know-how to do a good job of leasing their property, and there is no reason for them not to work with a reputable professional that leases properties on a daily basis and has a tried-and-true (and most importantly, consistent) method of screening applicants and flowing from the marketing process into showings, screening, and leasing.

I think that leasing is one of the most important parts of the process that can and should be outsourced by investors who can otherwise self-manage. If someone is admitting that they don't have the time for this important process, I don't think it's right to tell them they'd still be better off trying it themselves and painting all agents with a broad brush of mismatched interests. Again, my issue is more with this standard being unfairly applied just to the real estate profession.

Of course, not all PMs and real estate agents are created equal, and I'd always advise anyone looking to hire a professional to do their research and find a good fit. As you said, there are PMs out there that are outright terrible, they jump in and take on clients before having their own systems ready. But to answer your question, yes we do have lots of incentives to provide great service and use all the expertise and tools at our disposal, not the least of which is agency law. I think that people forget that we are a heavily regulated profession and owe the same duties to our leasing-only clients that we do to our full service management clients, or a buyer/seller we are representing in a transaction.

I think the bottom line is that there are unscrupulous individuals in any profession, and the vast majority of real estate agents ultimately want their clients to be successful and will work hard to that end.

Kyle J. · Answer

@Anna Sagatelova  Fair enough and thank you for your point of view.

For what it's worth, my post was based on my own opinions/experiences as a landlord who manages his own rentals, AND as someone who has been applying for rentals and signing leases as a guarantor and/or tenant (in cases where guarantors aren't allowed) for my "kids" (youngest ones are in their 20's) for quite some time.  (I just recently rented another house in Oregon last week for one of them who's going to school there.)

In these two vastly different roles, I get to see both sides - from the landlord's perspective, and from the tenant's perspective when dealing with property management companies.   And perhaps I'm too "hands-on" when it comes to tenant selection/placement, but to me that's just too important of a job to outsource.  (I must be doing something right though given my track record.)  Or perhaps my viewpoint stems from having never personally dealt with a single property management company that I would trust doing tenant selection/placement for me.  Some are okay it.  Some are downright terrible unfortunately.

That's not a condemnation of an entire profession though, or any indication of what you or any of the other property managers on this forum would be like.  Frankly, I've always generally agreed with your posts, and - from what I can tell by what you write - have to assume you'd do very well in your profession.  It is, however, an accurate account of my own experiences.

Therefore, the opinion I expressed before is one I stand behind.  Hopefully you'll find, as I do, that reasonable people can reasonably disagree.

David M. · Answer

@Gloria A.

Pretty much thats what real estate agents are for...

There was a reply about “what’s in it for the agent?”   Well... a savy agent would be in it for the long game.  Tenants tend to usually buy homes at some time...  even a happy/satisfied tenant can give the agent a referral.

Before I got my license, my Realtor made dozens of sale transactions “off my rentals” by working with my tenants.  It was quite lucrative for her.  Out of loyalty, she continues to maintain those accounts for me while is use my license elsewhere.

Good luck

Anna Sagatelova · Answer

Some property management companies do have a leasing-only option. Call around and ask. It is usually better than just finding a random real estate agent and asking them to list it; if they don't do leasing every day like a PM company, they probably won't have the best processes to market your property and accurately analyze the market rent.

Can I hire someone to get tenants in but not manage properties?

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