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02/14 - Renting

How Much Does it Cost to Hire a Rental Agent in Toronto?

Is a Rental Agent Expensive?

I love your question! This specific topic on the cost of a rental agent comes up quite often, so you are not alone!

If You Are a Prospective Tenant Looking to Rent

Are you ready for some good news? It costs you absolutely nothing to use a rental agent to help you find your dream rental property in Toronto. Your future Landlord covers all commissions owing. So, as a tenant, there are no service fees. How awesome is that?

What Are the Benefits of a Rental Agent for Tenants?

As a prospective tenant, you will have the benefit of using a full-service realtor to guide you through the process to include:

  • Understanding your wants and needs – for example, what are your location, parking requirements, pets, bedroom count, etc.?
  • Sourcing potential properties that meet your requirements
  • Booking appointments to view homes or condos that are of interest
  • Flagging the pros and cons of various features when previewing
  • Narrowing down your search quickly as the Toronto rental market moves quickly
  • Organizing your rental package in advance of offering on a space – for example, letter of employment, credit score etc.
  • Looking out for your best interests as a tenant when reviewing and signing your Rental Agreement
  • Explaining the terms and conditions of your Rental Agreement, so you understand what your responsibilities are
  • Ensuring that your deposit, monthly rental cheques, tenant insurance, utilities and the key exchange are organized in advance of possession
  • Walking through the property on the closing date to ensure your new home is in good condition and any damage is documented in advance
  • Coordinating an introduction with your future landlord so you know who to reach out to
  • Staying in touch with you through your rental term to ensure you are content and that things are running smoothly

Things to Look for When Hiring a Rental Agent

  • Look for a realtor that knows the rental market in Toronto and actively works in this segment of the business
  • Rentals are often more work than buying a house or a condo, so you want to find someone willing to hustle on your behalf
  • Sometimes (but not always) a more junior agent is willing to prioritize your rental search more than a very tenured or established realtor
  • Ensure the realtor has time to look after your wants and needs and can lead your search from the get-go
  • Inquire with a real estate brokerage or team if they have a rental specialist or division to advocate on your behalf
  • A rental agent also should be extremely communicative, trustworthy and very organized

3 Reasons Why a Rental Agent May Turn You Down as a Client

1. Budget

If you do not have a budget that aligns with current market rents, it may be very challenging for a rental agent to service your needs.  Rental agents can only book viewings at properties that are listed on the MLS System (‪Realtor.ca), which generally coincide with competitive rents. If this is the case for you, and you don’t have the budget, there’s other options. We recommend that you search for less expensive options listed on Craigslist, Kijiji or Pad Mapper. Alternatively, it may be worth exploring purpose-built rentals as a possible option if you have budget constraints.

2. Your Paperwork

A rental agent may not be willing to take you on as a client if you’re not able to provide a strong covenant as a tenant. This means, you will be required to produce a quality credit score, letter of employment, reliable references and a rental application with your offer. If you’re currently in a position that could make this paperwork challenging, it may be hard for a rental agent to agree to take you on as a client. Both you and your agent will end up spinning your wheels if you can’t provide a robust rental package!

3. You’re Not on Your Game

The Toronto rental market is very competitive. To find a top-notch rental in a reasonable period, it requires a lot of work and commitment. And, this is on the agent’s side! If you are not communicating, you are showing up late to viewings, cancelling at the last minute or disrespecting the process…it is just not worth the agent’s time and energy. If you would like to read more about finding a rental in Toronto, click here.

If You Are Prospective Landlord Seeking Rental Services:

The total cost to the landlord for rental services is one month’s full rent + HST. Typically, the breakdown is 50% of the fee goes to the listing agent and 50% of the cost goes to the agent representing the tenant. This commission is deducted from the initial deposit that the tenant provides with their offer to lease (first and last month’s rent via certified cheque) — a balance cheque will be delivered to you after occupancy.

This sounds like a great option!

What Are the Benefits of a Rental Agent for Landlords?

  • A full-service rental agent to guide you through the process from Point A – Point B
  • You’ll eliminate a lot of the heavy lifting as a landlord
  • A rental agent will gather information about your property to provide you with an accurate pricing evaluation
  • Your agent will communicate with your current tenant (if existing) to ensure they are up to speed with the rental process and showing protocol
  • Your rental agent will arrange access keys, lockbox setup, sign installation, cleaners and photographs (see below)
  • Once the paperwork is completed, your property will be listed on the MLS System (‪ca) and syndicated on various search channels
  • When a prospective tenant submits an offer to lease on your home or condo, your rental agent should be screening them as follows:
    • Rental Application with previous landlord information
    • Professional references
    • Personal references
    • Letter of Employment
    • Credit check with beacon score
    • Social media screening
  • Should the tenant have a strong covenant, a solid offer and clean paperwork, your rental agent will negotiate a comprehensive Lease Agreement that protects the Landlords best interest
  • Your rental agent should also ensure that the tenant provides proof of utility accounts, tenant insurance, key deposit and monthly rental cheques before any keys are exchanged on closing
  • On the closing date, your rental agent should complete a walk-through of the property with the new tenant and their agent to document any minor damage, issues or concerns
  • Coordinating an introduction with your tenant so you know who to reach out to should you need to communicate about anything throughout the rental term
  • Finally, your agent should in touch with you throughout the tenant’s rental duration to ensure you are content and to be proactive about rental increases and rental renewals

Things to Look for When Hiring a Rental Agent to Act on Behalf of the Landlord

  • Look for a realtor that knows the rental market in Toronto and actively works in this segment of the business
  • Ensure the realtor has time to look after rental listing and is willing to respond to various questions and phone calls that come in from agents and the public
  • Ask a real estate brokerage or team if they have a rental listing specialist to market your property for lease
  • A rental agent also should be extremely communicative, trustworthy and very organized
  • A strong understanding of the Residential Landlord & Tenancy Act is key

3 Additional Costs for Consideration

1. Photographs

Lastly, it’s strongly recommended to have your space professionally photographed if you do not already have high-quality images. This is the most critical thing you can do to ensure the success of the listing; and, properties with pro-photos have proven to not only lease faster than those without, but for more money. These photos will become an asset to you down the road. If you ever need to release or relist your property for sale, photos will help, especially when it’s tenanted. Generally, the cost for photography is $250 – $300 and is the responsibility of the Landlord to pay.

2. Cleaners

Ensure that the property is in top-notch condition and ready to go for viewings. It’s recommended to be professionally cleaned. You may also need to send in cleaners again after your current tenants (if existing) depart. We have seen some filthy places! The cost of services will largely depend on how large your home or condo is.

3. Painting

Sometimes a coat of white paint goes a very long way. If it’s time for a little pick-me-up before leasing out your property, a rental agent should be able to put you in contact with an excellent painting service that can look after your requirements swiftly and at a competitive price.

If you would like to learn more about what you need to know about being a landlord, click here.

Leasing With Fox Marin

The leasing process isn’t as simple as many people assume. When you get into a difficult situation, it can really pay to have a professional on your side. Fox Marin can help. Our Leasing Division manages up to 100 rentals annually. We’re well-equipped to manage your rental needs, whether you’re a landlord looking to rent out your home or a tenant looking to acquire a new space!

This article is written by Kori Marin, Managing Partner and Broker at Fox Marin Associates. With a passion for Scandinavian design and all-things-Toronto, Kori brings her own brand of charismatic energy, creative integrity, and expertise to her work.