We are winding down for year 2017, time for New Year's resolutions,. If one of your wishes to to make more money, investing in Atlantic City should be a winner. After digging out from the recession,
What A 10 Percent Rental Commission Rate Does For Owners And Renters
In another work life, I was a writer. But before that, math and statistics were my true love. Whether it's baseball or basketball stats, figuring out pot odds and number of outs in a poker game, or crunching the numbers in real estate, I still love to check the numbers and find the meaning behind them.
One number that makes our Weichert Realtors - The Asbury Group office unique is this one: a 10% commission rate on rental listings. It's the lowest in town, period. You'll see 12%, 15%, even higher with other agencies. For us, this isn't about low-balling. It's about fairness.
Ocean City has a vibrant rental market. If you have a well-maintained property with reasonable pricing, the odds are very high that you will be able to fill every week from Memorial Day to Labor Day with weekly renters. There are a wide range of rates, depending on size, location and which week in the summer you want to rent. For example's sake, I'm going to use what I would consider a common weekly rate in town for a 3 or 4 bedroom home, a couple of blocks from the beach at near-peak season: $3000.
At $3000, the 10% commission for the consummation of a rental agreement for a week is $300. If the rate was 12%, that cut would be $360; at 15%, you're talking $450. That is $60-150 per week that instead of going to a real-estate broker, stays with the owner. If you spread that over, say, 10 weeks of rentals that we do instead of a real-estate firm with higher commissions, that's a $600-1500 difference. That's not chump change. It's the type of return that could motivate an owner to delay or lower the amount their rental rates increase year to year. If half of that found income at 10% vs. 12-15% finds its way back to the renters, you're heading on your vacation with $30-75 more in your pocket, which will buy you a pretty nice slice of pie at Manco & Manco.
The rental business in Ocean City is competitive. There are a couple of longtime agencies who flood the island with signage and entice owners with their "discount" commission rate if you make them your exclusive listing agent.
Here's a fun fact: their discounted commission isn't as low as our standard commission - 10%, no strings attached. It also means that the steady wave of prospective renters who call our office - or those of other agencies, for that matter - aren't going to hear about your rental property. Sadly, your house is on an island, only visible to renters if specifically visit your real estate agent's web site, or come down and see the sign on the house in person. In this world of online shopping, that latter scenario is becoming less and less common.
Besides, we are here to serve you, to be the experts, to know which rental properties best serve you. It's why we make a commission on rentals. It's our job, and personally I have come to love the challenge of finding the best house for you, the customer.
The short-sighted vision for an agent in this line of work would be to want a higher commission, to simply get paid more for the same work. But for a math geek like me, the fact that we have a lower commission rate means we should be able to make up that 20-50% deficit in commission with volume. I want to make more by doing more, by having more homes listed, by making the owners a prettier penny on their investment, by keeping the rental costs under control and affordable for people who are spending their hard-earned money to come to the beach and forget about the daily grind for a while.
That's why I say, with pride, that we have the lowest rental commission in Ocean City, NJ, and that if you aren't listing your home or renting your vacation property through us, you're missing out on money in your own pocket and your slice of boardwalk pizza.