Fees related to real estate (rental) referrals
I own a corporate lodging business that specializes in extended stays (30+ nights). I also moderate a group of fellow landlords/hosts, there are about 250 people in this group. Some in the group do extended stays, others do not.
I often have individuals who contact me who are looking for housing, which I can’t accommodate, mainly due to availability. About half the time, these individuals are people I’ve worked with before, housing coordinators for TV shows, HR reps looking to house summer interns, etc. Half the time they are “over the transom” leads of people I’ve never had contact with.
When I don’t have housing for people, I gather as much information as I can: number of bedrooms needed, move in and out dates, desired neighborhood(s), reason for visit, names of guests, their monthly housing budget, etc. I vet the guests to confirm their identity. Then I post all of this information to the Airbnb group. They, in turn, forward a listing. I review the listing to confirm it meets the guest criteria. If it does, I forward this to the guest or housing coordinator w/ contact information for the local host.
These referrals are all for extended stays, usually 2-6 months and represent as much as $20,000 in revenue for the landlord/host. In the past, I’ve not asked for a finder’s fee, but the number of referrals I’m forwarding to the group is increasing, about 5 a week. I’m happy to do it, it’s great to help others succeed, but I also feel like I should be compensated for my time as well as their benefiting from the relationships I’ve cultivated over the years.
What would you think would be a reasonable finder’s/referral fee to ask for? A straight percentage of gross rent or a scaled fee (e.g., $50 for up to $2,000 in gross rental income). Thanks so much!
Best case scenario is to bid others against each other. You should gather all your analytics over the past 2+ years and have a percentage in mind of what your minimum will be. (I’d stick with a percent as there will be a firm understanding and balanced rate going forward)
Take your data and quote out with people and gather real offered rates and hire a contracts lawyer to write your contract.
Bottom line, you’re doing work that deserves a return.
Good luck 🙂
Hi, Julie – thank you so much for your question! Booking sites like Airbnb and VRBO are already charging a fee so there may be a number of owners who don’t want to pay an additional referral fee. That said, 5% to 10% commission on rental income is typical for someone who is representing a tenant in the industry. Keep in mind that you may also want to check with the local Board of Realtors in case taking a commission on rental income is seen as acting as an unlicensed real estate agent.
Best of luck,