Ways into the apartment business: Leasing

Further to our earlier conversation about ways into the apartment business…

Another good way into the business is through leasing. Technically, you are supposed to have a real estate license to lease apartments. However, many management companies use unlicensed leasing agents, in part because very few licensed sales agents are willing to work for the relatively small commissions available in leasing.

Here’s how the leasing business works: You get hired by a management company to fill units. Generally, you are responsible for posting ads in the relevant places (Craigslist, Westside Rentals, etc.). You take the calls, arrange showings, take applications, and then close leases.

Generally, the pay is something like $100-400 per closed lease, depending upon who you work for, the rents you’re getting, etc. Obviously, the less your management company wants to charge relative to market, the easier it is for you to close leases, and the less they’ll want to pay you.

The career path in leasing has two different branches. Someone who can close should probably go get a real estate license and then start selling property on her own, because the upside is much better in sales (tens of thousands of dollars, instead of hundreds).

Another possibility is to stay in leasing, but move to high-end, luxury properties, particularly ones that are just opening. Because these buildings desperately need occupants (in order to stabilize their rent roll and be able to re-finance their expensive construction loans), the companies that manage them are generally willing to pay very high lease commissions. You could do pretty well closing 20-30 leases at $750-1,000 / lease at one of these buildings.