Finding Fair Compensation for Listing and Sourcing Medium Term Let Tenants
Are you considering becoming a listing manager for Medium-Term Lets (MTLs) or wondering how to fairly compensate someone in this role? This blog post will dive into the nuances of determining fair compensation for listing an MTL property and sourcing tenants, offering insights and considerations for listing managers and property owners alike.
Understanding the Role of a Listing Manager
First, let’s clarify what a listing manager does. A listing manager’s primary responsibility is to source and find suitable tenants for MTL properties. Unlike property managers (PMs) who oversee tenant relationships and property maintenance, listing managers focus on the initial stages of tenant acquisition.
Now, let’s explore the various factors that come into play when deciding on fair compensation for listing managers.
1. Percentage of Rent vs. Flat Fee: The Two Compensation Models
Percentage of Rent: This compensation model involves charging a percentage of the monthly rent for the duration of the tenant’s lease. The typical range for this percentage is between 50% to 100% of one month’s rent. Here are some pros and cons:
Pros:
-
Aligns compensation with the success of the rental.
-
Provides listing managers with an incentive to secure tenants quickly.
-
Income scales with the rental rate, potentially earning more for high-end properties.
Cons:
-
Property owners might find this model expensive for long-term lets with stable monthly rents.
Flat Fee: In this approach, listing managers charge a predetermined flat fee for their services. The flat fee can vary widely based on factors such as market conditions, location, and the level of service provided. Here are the pros and cons:
Pros:
-
Offers property owners a clear and predictable cost.
-
May be more attractive for owners of lower-rent properties who won’t be charged a percentage of rent.
Cons:
-
Listing managers may need to handle multiple properties to generate significant income.
-
Income isn’t directly tied to the rental rate, potentially resulting in lower earnings for high-end properties.
2. Market Considerations:
The compensation landscape is heavily influenced by local rental market conditions. In competitive markets with high demand and low vacancy rates, listing managers can often command higher fees. In contrast, in slower markets, fees might be more competitive.
3. Level of Service:
Consider the scope of your services as a listing manager. If you provide additional services beyond tenant sourcing, such as property marketing, tenant screening, or lease preparation, you may justify higher fees.
4. Local Industry Standards:
To set fair compensation rates, research local industry standards and consult with other listing managers and property management professionals in your area. Understanding typical compensation structures can help you align your fees with market expectations.
5. Negotiation:
Keep in mind that compensation is often negotiable. Property owners may be open to discussing fees based on their specific needs and the value they perceive in your services.
6. Value Proposition:
Highlight the value you bring to property owners. Emphasize your expertise in the local rental market, your ability to find quality tenants quickly, and any unique services you offer.
In conclusion, determining fair compensation for listing an MTL property and sourcing tenants is a nuanced process. It depends on various factors, including market conditions, services provided, and property owner preferences. As a listing manager, being transparent about your fees and working collaboratively with property owners to find a compensation structure that benefits both parties is essential. By considering these factors, you can navigate the world of MTL rentals and build a successful career as a listing manager.
Written By Thomas Grimes
