The Problem with Rental Appraisals…
Why are sales agents doing rental appraisals? And what will it mean for owners when they do?
I recently went to an appraisal. The owners showed me around the newly built property and identified all its features.
I always come prepared, bringing a new client pack which includes our services, fees, brochures for smoke alarms and landlord insurance, comparables and testimonials.
After chatting for a while, I found they were very impressed with everything we talked about until we got to the potential rent.
They advised me that a sales agent had inspected their property and had given them a figure vastly different from mine – higher and in my opinion totally unrealistic. The sales agent hadn’t shown the client any comparables to justify their rental return or testimonials of satisfied owners. The sales agent was quoting a high figures just to get the listing.
Time after time, I have been to appraisals to find clients have had their properties appraised for sale and to rent at the same time, by a sales agent.
I would only ever advise that an owner get a property manager or a BDM to do a rental appraisal. Property Managers know the leasing market as they handle it every day. Property Managers have the knowledge to provide the landlord with information regarding current legislation, what landlords must do and what tenants are expected to do.
I would never do a sales appraisal as it is not my area of expertise. I would have one of my sales colleagues come along with me to do it. Sales agents should do the same thing and bring a property manager or BDM from their office with them.
I ended up listing the property as the owner appreciated my honesty and wanted to be realistic with rent. I believe there is no point listing a property that you have overpriced only to let it sit on the market for weeks. It’s frustrating for the owner which leads to unnecessary stress.