Pros & Cons: Signing an Exclusive Right to Rent Agreement as a Boston Landlord

As a landlord in Boston, choosing how to list your rental property is a critical decision that can greatly impact your success in not only finding the right tenants but also in achieving optimal rental pricing. One strategy worth considering is signing an Exclusive Right to Rent Agreement with the best real estate agency that will put you in the proper position to be successful. This agreement grants one agent or company the exclusive right to market and rent your property for a specified time, meaning no other agents or companies can list your property during that period. While there are many benefits to this approach, it's important to weigh the potential drawbacks as well. Below, we’ll explore both the pros and cons of entering into an exclusive right to rent agreement, with a focus on why it might be a strong option for landlords in Boston if they know what to look for in a real estate agent or brokerage.

Pros of Signing an Exclusive Right to Rent Agreement

Simplified Communication and Convenience

One of the primary advantages of an exclusive right to rent agreement is the ease of communication it offers. As a landlord, you will only need to interact with a single agent, which significantly simplifies the rental process. This streamlined approach reduces the number of phone calls, emails, and showing schedules you have to manage, making the process less stressful. The designated agent takes care of everything from advertising the property to vetting potential tenants, leaving you with more time to focus on other matters.

Focused Marketing Efforts

When you sign an exclusive agreement, the selected agency is incentivized to put substantial effort into marketing your property. Because they are the only ones with the right to rent your unit, they are more likely to invest time and money into robust marketing strategies to ensure the property is rented quickly. This often includes posting the listing on multiple websites, optimizing it for search engines, and leveraging social media. You might want to ask the brokerage and agent to show you their overall web presence and examples of their marketing campaigns. Some apartment leasing agencies have highly optimized syndication software that automatically populates your apartment across the widest digital audiences for the best reach in the shortest period of time.

You are going to want to get feedback quickly on their leasing campaigns. You can ask for reports on the number of interested parties and how many showings have occurred so that you get the best information and can make adjustments and enhancements if necessary. Agencies that specialize in apartment rentals, like Boston Pads partners, have advanced reporting and market data tools that can help you adjust your pricing and product placing in real-time. At certain times of the year, pricing can fluctuate and certain months may generate far more rent than others. When there is a lot of supply in your area, or you are in an off-peak season market situation, you are going to want to deploy customized and locally optimized technologies that syndicate your listing across the most platforms with just one click, ensuring maximum exposure.

Efficiency in the Rental Process

The efficiency gained from dealing with just one agency that has a long-standing history of apartment leasing success can be a game changer for most landlords. A real estate platform that understands the entire leasing process will often provide you with ideas and streamlined operations that you may have never considered. You may end up with fewer documents to sign, less communication to deal with, and a greater amount of high-quality rental applications to review in a shorter period of time. This efficiency can lead to a much better rental process, particularly when working with an agency that is well-versed in each micro-Boston rental market. Rent prices can often change dramatically even a few streets away and impact both a positive or negative outcome for you, so it is imperative that you are given access to high-quality information and the ability to adjust pricing to real-time conditions.

Expertise in Pricing and Market Trends

An experienced agent will help you set a competitive price and work diligently to ensure your property is rented quickly. You are also going to want a real estate agency that understands price reduction strategies and/or even price increase strategies. A reputable real estate platform should also be able to tell you the exact percentage of landlords that are paying the various brokerage incentives in your neighborhood. You will also want to know how long each apartment is staying on the market in your neighborhood.

If a real estate agent can’t provide you with this information at their fingertips – it is probably a clue that the agency focuses on residential sales but doesn’t understand the leasing process. You should also listen to how an agent speaks to you about a plan. If you keep hearing multiple times from the agent about selling rather than renting, it might be a clue that they don’t want to rent the unit. Perhaps they would prefer you sell the property? Make sure that you properly vet your agent and that they have your best financial strategies in place before signing an exclusive right to rent.

Comprehensive Support Services

An exclusive right to rent agreement often includes access to a range of additional support services that can be incredibly valuable. For instance, agencies like Boston Pads provide digital documentation, secure key management, and even professional virtual tours to enhance the marketing of your property. These services provide peace of mind, as does knowing that your property is in capable hands. Furthermore, the agency’s experience with legal paperwork and compliance ensures that all transactions are handled smoothly and in accordance with current regulations.

Cons of Signing an Exclusive Right to Rent Agreement

Risk of Choosing the Wrong Agency

One of the biggest risks associated with an exclusive right to rent agreement is the potential to sign with an agency that doesn’t specialize in apartment rentals or lacks the necessary expertise in the Boston market. There is a huge knowledge and expertise chasm between effective apartment leasing and a residential sales agent. A residential sales agent will most likely not be using any customized software that gets your listing out to the right people and places to get your effective feedback to close the deal in an optimal manner. It is often easy to be swayed by persuasive sales pitches from agents who are more focused on residential sales than rentals. They may tell you it is harder to sell a property than rent a property but nothing could be further from the truth. You will want an agency that brings you the best tenants because you will be dealing with them most likely for one year or longer. A lot of residential sales agents simply don’t have the background and experience to vet clients or bring you enough applications to make a great decision. If you choose an agency that doesn’t have the right experience, your property may not receive the attention it needs, and it may not be marketed as effectively as it should be. The internet is littered with stories about how some agencies will take a rental listing and not get it rented for months. If you sign with the wrong agency, you might end up going vacant and suffer significantly reduced rental income. It's crucial to do your research and select an agency with a proven track record in apartment rentals, particularly in your local area.

Limited Market Exposure

By committing to an exclusive agreement, you limit your property’s exposure to the marketing capabilities of just one agency. If that agency doesn’t have a strong digital presence, effective syndication technology, or in-depth knowledge of the local market, your property might not reach as many potential tenants as it could if listed with multiple agencies or with one company that specializes in apartment rentals. This could prolong the time it takes to find a tenant and may result in lower rental income. To mitigate this risk, it’s essential to choose an agency with a robust marketing strategy and proven success in the Boston apartment rental market.

Co-Broking Your Rental

Many lesser real estate offices that don’t focus on apartment rentals will often tell you that they can make up for their lack of marketing prowess by listing in places where they can co-broke it with other agencies. Beware the rental co-broke pitch because it is not the same as co-broking in sales. In rental co-broke situations, the rental commissions are much smaller, so real estate agents that are experts in apartment leasing and rent the most properties will most likely have an ample supply of great product that does not require them to rental co-broke and give away half their earnings. This means the best agents are nearly always showing the best apartments that rent quickly, and they receive a better commission for themselves.

Think about it, why would an accomplished apartment leasing expert have to give away half of their money to another agent simply because they list it on an open forum? A true leasing professional has to rent a lot more apartments than a residential sales agent, so they are not interested in rental co-brokes unless it is a last resort. You most likely don’t want your property being shown by inexperienced or unsuccessful agents because they may be missing explaining or displaying your property in the best way possible. So, you’re going to want to know how your agent is going to lay out a highly successful rental leasing plan and what mechanisms they are going to put in place and in what order to give your property the best chance to rent. Perhaps you want your agent to market it throughout their entire network of offices but make sure the agents are compensated properly so your unit is not ignored. Or perhaps they blast out your unit through their syndication network for two weeks, and if there is no action, then they place it on rental co-broke sites? You have a lot to think about when it comes to choosing the right apartment leasing team.

Conclusion

Signing an exclusive right to rent agreement as a Boston landlord offers several compelling benefits, including simplified communication, focused marketing efforts, and expert pricing strategies. However, the success of this approach depends largely on selecting the right team and agent. It’s crucial to choose a company with the strongest track record in apartment rentals, extensive market knowledge, and technology and marketing resources to give your property the attention it deserves.

When done correctly, an exclusive right to rent agreement can streamline the rental process, enhance your property’s visibility, and help you secure the best tenant quickly and efficiently. It can also help you maximize your rental income. However, it’s essential to do your homework and ensure you’re partnering with an agency that truly understands the Boston rental market and has the experience to back up their promises. By making an informed decision, you can reap the rewards of an exclusive agreement while minimizing potential risks.

Contact us to discuss how Boston Pads can help you maximize your rental income and streamline the rental process. Even if your properties are already rented for the current cycle, we can help you determine when is the best time to discuss your renewals for the following year. We have helped thousands of landlords optimize their portfolios and get their properties onto the correct leasing cycles that they might have missed otherwise. The result for our landlords is a property rented faster, at a better rent, and with higher qualified candidates. We look forward to enhancing your apartment leasing experience.