How Do Realtors Make Money on Rentals


Besides having a family or dream career, many people dream to own their very own home. However, it’s difficult to find the right home in the right location without the help of real estate agents, or realtors.

Real estate agents and realtors are professionals who are responsible for helping aspiring buyers or renters to find their homes. They also assist people who want to sell or rent out their homes or properties. 

The unique thing about being a realtor is that they have to represent their clients. If their client wants to buy a home, they have to compile a list of possible homes and contact the respective owners. If their client wants to sell their home, they have to take calls and attend to messages.

This begs the question: how do real estate agents make money on rentals? It’s difficult to tell if realtors earn money on an hourly basis or through commission. We’ll be running down the different ways they make money, and how you can either find one or become one yourself. This article will be focusing on rentals: properties where tenants will be paying a landlord on a monthly or annual basis, rather than buying the property in full. 

How do realtors make money on rentals?

There are two main ways that real estate agents can make money on rentals. The first is the realtor earning a percentage of the lease once it is signed. Say that a rental’s annual lease is worth $30,000, which is $2500 per month. The realtor can agree to earn 10% of the lease, which is $3000. This can be received by the realtor in one payment, or in staggered payments. 

The second way a realtor can make money on rentals is by getting a cut from the monthly rent of a tenant. This is the most common form of payment for a realtor. The commission is usually taken from the tenant’s payment of the first month of rent. 

In both ways, real estate agents earn money through commission. The more tenants they connect with landlords, and consequently, the more leases they get signed, the higher the income. It may be difficult for a real estate agent to start out in the market, but it is highly possible (and common) for successful agents to earn huge sums of money depending on the areas they specialize in.

Being a real estate agent can seem like a very unstable job. This is why there are many real estate agencies that employ multiple realtors. This ensures that aspiring renters and sellers can easily access a list of real estate agents to assist them, while also ensuring that these realtors get paid 

What is a realtor?

As mentioned, a realtor or real estate agent is someone who assists either (or both) aspiring tenants in finding properties, or aspiring sellers to sell their properties. If a realtor is assisting a potential tenant, their responsibility is to consistently communicate with their client on the properties they’re interested in. Beyond this, they are also required to schedule meetings or property viewings with owners.

If a realtor is assisting a seller, the main responsibility is to post listings of the properties on different real estate websites. They can also promote these listings on social media accounts or through other real estate agents to whom they’re connected.  Email lists or newsletters are also a way for realtors to promote available properties.

Realtors are also responsible for preparing and processing important documents, such as lease signings and contracts. They can also assist in budgeting and finding the best prices and rates for properties.

The extensiveness of the job and its responsibilities make a real estate agent’s salary quite high. Realtors need to constantly be aware of trends and the demands of the real estate market. 

How do I become a realtor?

Becoming a real estate agent has different requirements, depending on where you live. In the United States, there is no national license for aspiring real estate agents. It is important for you to research first what is required by your state before you pursue a license.

In general, you will first need to pursue a pre-licensing course from a real-estate licensing school. These courses will prepare you for the licensure exam. The number of course hours required before an individual can take the licensure exam depends on the state. 

After you’ve completed the required hours for your pre-licensure course, you will have to take the licensing exam. This exam will test your knowledge of state laws concerning real estate, real estate principles, and real estate practices. 

Being a real estate agent is different from being a realtor. Realtors are considered a part of the National Association of Realtors. If you take the extra step to become a realtor, you can earn access to different business tools and educational opportunities.

Once you earn your license, you can find a real estate agency or brokerage to join, and start working with clients.

Working with real estate agents can green your odds in finding the perfect properties for your needs. If you’re considering benign a real estate agent or realtor, the best tip to take note of is to work well with your clients because they determine your commissions and opportunities. 

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