Myths that are costing you money: Rentals vs sales

Many real estate agents leave money on the table by focusing exclusively on buy/sell transactions. While rental commissions may be smaller per transaction, they can provide business stability, build valuable client relationships, and generate future opportunities—especially in major metropolitan areas. 

As Ray Amouzandeh, a successful San Francisco residential leasing agent and RentSpree user explains, "The first quarter of 2025 was the strongest quarter we've ever had in terms of revenues and profit. You’re seeing all the tech workers walk around with their backpacks. With the three-day mandatory return to office policies, people are coming back to San Francisco. We're seeing many out-of-towners relocating from the Midwest and East Coast."

Let's explore some common myths about rental transactions that might be preventing you from expanding your real estate business and increasing your income.

Where renters need the help of an agent

The rental market continues to show strong demand across much of the country, even amid some price fluctuations. According to the Apartment List National Rent Report, as of April 2025, the national median rent stands at $1,392, up $7 from the previous month but down slightly (-0.3%) year-over-year.

While prices are down 3.5% from their mid-2022 peak, they remain 21% higher than January 2021 levels, demonstrating the long-term strength of the rental market. Cities like New York, Boston, Chicago, and San Francisco have such competitive rental markets that working with an agent is practically required to secure desirable properties. According to rental experts, these urban centers often have unique systems where agents provide essential access to available units and help navigate complex application processes.

"In San Francisco, based on the last stats that I looked at, they're about close to 75% renters versus owners," shares Amouzandeh. This pattern repeats in many urban markets where renters far outnumber buyers, creating a much larger pool of potential transactions.

Nathan Yamamoto, customer onboarding lead at RentSpree notes, "We've seen a lot of growth in the rental space in the US these past few years. Obviously starting with the pandemic, people were moving from place to place, not necessarily being in a more metropolitan area. They were going to more affordable housing or more affordable places, so we have seen an uptick in that."

For agents, these growing markets present significant opportunities to build a rental-focused business that can later transition to sales as clients build equity and readiness to purchase.

Myth #1: 'Rentals don't pay enough'

One common objection to working with rentals is the perception that they don't pay enough to justify an agent's time. But this isn’t always the case.

"A lot of very close friends of mine, my colleagues, very successful brokers in sales, they lost their shares throughout the economic ups and downs in the cycles,” shares Amouzandeh. “If you're handling 500 doors in leasing, then there's always business on the table.”

For rental transactions, commission structures vary by market. According to RentSpree's guide on rental commissions, the most common structure is percentage-based commissions, typically ranging from 2.5% to 15% of the yearly rent or the total lease value for multi-year leases. For example, if the annual rent is $24,000 and your commission rate is 7%, you would earn $1,680.

Another option is a flat fee, usually equal to the first month's rent. In most cases, the landlord pays the commission, though in some markets like Boston or New York, tenants often pay a portion of the agent's fee.

Amouzandeh explains how commissions work in his market: "In San Francisco, generally, you represent the landlord if you are representing the landlord, you get paid by the landlord, it varies anywhere from 5% to 10% rate."

Though each transaction may be smaller than a sale, the volume can add up quickly—especially considering that rental clients often need new housing every 1-2 years, creating recurring business opportunities.

Myth #2: 'Rentals are just for new agents'

It's common to hear that rentals are merely a starting point for rookie agents who haven't yet broken into sales.

A lot of agents don't pay a lot of attention to rentals because they generate less immediate commissions than sales. But the bigger goal of working with a rental is solidifying a relationship and building future business. It may not be an immediate monetary return, but in the long run, you can get referrals from these people and you can get future business from them.

Experienced agents can use rentals as another service to offer existing clients. When a past client calls about finding a rental for their child heading to college or needs help leasing their investment property, being able to assist strengthens the relationship.

My advice is not to think of real estate as just strictly buy and sell, because you're in it to provide an overall real estate experience, no matter what your clients’  journey might look like. They might be on a rental journey now, but a buying or selling journey later.

Myth #3: 'Rental agents also have to be property managers'

Many agents hesitate to enter the rental market because they confuse rental transactions with property management. These are distinctly different services with separate responsibilities and business models.

There's a huge distinction between a property manager and an agent. The agent facilitates the transaction. They market the transaction primarily and then they connect the two parties. The property manager manages the property after that lease is signed.

The rental agent's responsibilities typically include:

• Marketing the property
• Scheduling and conducting showings
• Screening potential tenants
• Handling the application process
• Facilitating lease signing

The property manager's responsibilities, which begin after lease signing, include:

• Collecting monthly rent
• Handling maintenance requests
• Managing tenant issues
• Conducting regular property inspections
• Handling evictions if necessary

Amouzandeh describes his company's clear distinction: "We represent the landlords. I personally am the listing agent." His focus is finding qualified tenants, not managing properties after lease signing.

Myth #4: 'Rentals don't lead to future business'

Perhaps the most compelling reason to incorporate rentals into your business is the relationship-building potential. 

Here’s an example from my own experience: One agent had helped a couple with a rental. She was representing them as the renter, and she placed them. This couple just had a huge family. From that one rental transaction, she was able to trace that she got about 30 additional transactions from it. And they weren't just rentals; they were also buy and sell.

While not every rental will lead to dozens of future transactions, each one represents a chance to demonstrate your value and professionalism. When rental clients eventually decide to buy, or their friends ask for agent recommendations, you'll be top of mind.

"A lot of times I'll take on rentals that I don't want to take on for whatever reason,” says Janine Acquafredda, an experienced New York City real estate agent. “Just to maintain that relationship—so that I can get the sale when the time comes that they no longer want to be landlords."

Rental clients are often at transitional points in their lives—relocating for work, downsizing, or starting out on their own. By serving them well during these transitions, you position yourself as their go-to real estate expert for future moves.

A lot of times mom and dad might have purchased a home, but now, their son or daughter is going off to college and they need a place. Instead of ignoring that request to help the son or daughter, you can say, 'Yeah, of course I can help them. I'm in real estate.' It solidifies that relationship."

Myth #5: 'Finding tenants takes too much time and effort'

In the past, rental transactions required agents to collect paper applications, manually run credit checks, chase down references, and handle a mountain of paperwork. Today's digital tools have dramatically reduced this workload.

Yamamoto explains: "The old way that agents used to do it is they would get the application, submit that application to a credit reporting agency, and get the reports the next day. For us at Rentspree, it's more streamlined. There's a link that's created once you select your option and who pays the fee. That's sent to the applicant. The applicant then enters their information... and the report is generated almost instantly and sent to the agent almost instantly as well."

Modern screening tools handle the most time-consuming aspects of tenant verification, allowing agents to focus on providing value through their local expertise and negotiation skills.

"Everything is faster and more accessible on the dashboard, and the agent doesn't feel pressured to put more emphasis on a space they may not be familiar with," adds Yamamoto.

Myth #6: 'Getting started with rentals is too hard'

For agents looking to add rentals to their business, the barrier to entry is relatively low. Taking a strategic approach can help you build a rental business quickly and effectively.

Amouzandeh advises being proactive: "Our job is to do 90% prospecting. So, if you're not doing 90% of your time prospecting, then that's the first thing that you should do. How do you begin? One option is to go to an agency that can give you leads to prospect to."

Here’s some advice for new agents: Call your friends and family and ask them if they might have a real estate need."

It's just taking those little steps, working with rentals to kind of grow their business into something else. Rather than expecting immediate million-dollar listings, use rentals to build experience and connections.

Simplify rentals with RentSpree

RentSpree offers agents a comprehensive solution to streamline the rental process:

• No cost to agents—applicants pay directly for screening reports
• Comprehensive screening tools including credit reports, background checks, eviction history, and income verification
• Marketing tools to promote your rental listings
• Secure deposit collection for clients
• E-signature capabilities for faster lease signings
• Time savings that translate to more deals and more commissions

Getting started with RentSpree takes just three simple steps:

1. Sign up for a free account
2. Add your listing
3. Share an application link with renters

Build a more sustainable business with rentals

Rentals offer real estate agents a way to diversify their business, build a pipeline of future buyers, and create stability through market fluctuations. As Amouzandeh puts it, "If you want to have a guaranteed income being in sales, you need to build a business that's residual and that creates income every year.” 

By understanding the true value of rental transactions and leveraging how technology can help you handle them efficiently, you can expand your real estate business and create multiple pathways to long-term success.

Thousands of agents are already using rentals to grow their business. Why not you? With RentSpree Academy, you’ll learn how to market, screen, lease, and get paid. All while building a long-term plan that fits your income goals. It’s free, fast, and built just for agents. Take a free course at RentSpree Academy.