Apartment locators work in a capacity similar to real estate agents, but for rentals instead of buy-sell transactions. As a result, they earn their income in the same way, through commissions for each lease a client signs. However, that commission comes from the buildings or landlords looking for qualified tenants and not from the renters themselves. As a result, apartment hunters receive free help, building managers get quality applicants, and locators earn a living helping both their clients and the rental businesses with whom they work.
Related: What Is the National Apartment Association?
How Much Commission Do Apartment Locators Get?
The amount of each commission payment varies, but the most common rate equals 100% of the first month’s rent. However, empty units cost buildings a lot of money, so when a leasing office needs to fill a bunch of apartments, they will often raise that commission above 100% as an incentive for locators to bring applicants to them. Likewise, when a building sits at or near capacity, they might drop their commission to 50% because they don’t need the influx of residents at that time. Some buildings offer a flat rate instead of a percentage, such as $1,500 for each lease.
As with real estate agents, locators share their commissions with the brokerage they work for according to a predetermined split. A brokerage will either set a standard split across the board for all of their agents, or allow employees to negotiate that split as part of their hiring package.
50/50 is a really good split, so if you can achieve a rate in that ballpark, go for it.
For an example of what this system looks like in practice, say a locator helps a client find an apartment that costs $1,800 a month at a 100% commission rate. The client will sign the lease and move in, and then the building will pay the brokerage $1,800. Next, the brokerage takes that commission and applies the locator’s commission split, which, if set as a 50/50 split, means that the locator pockets $900 from that deal.
How Does this Commission Rate Compare to Traditional Real Estate Agents?
One key difference between apartment locators and real estate agents is the number of deals a locator closes in a month. Real estate agents might sell a handful of houses in one year, but with a much larger payout per transaction. Apartment locators might close ten or more deals in a single month, but at a lower payout per transaction. Those fast-paced transactions add up fast, especially once a locator hits their stride and learns how to bring in leads at higher rates.
Nevertheless, it does take time for apartment locators to build their business up to a sustainable place, but real estate agents typically take much longer to reach that point. As a locator, you will begin closing deals within a matter of weeks, whereas real estate agents tend to work for months before making their first sale, especially since a single buy-sell transaction takes a few months to complete. Thus, locators will start to make money quickly, but they could wait several months before seeing their income arrive at their desired level.
Related: Social Media Marketing for Real Estate
Learn More About Apartment Locating
For anyone interested in pursuing a real estate career, apartment locating presents a great option for building a business that allows for independence and flexibility in its day-to-day operation. If desired, some locators eventually move into mentorship or leadership roles over time, and others expand their business into buy-sell transactions at brokerages like The Nav Agency. Whatever path appeals to you, learning more about this career option before jumping in will help you make an informed decision. Here are some resources to guide you through your exploration.
What Has Been Missing from Real Estate?
AptAmigo Is the Best Place to Start a Career in Real Estate
Why Crystal Jaramillo Switched from Traditional Real Estate to Apartment Locating
How to Market Yourself as an Apartment Locator
How to Find Work-Life Balance as an Apartment Locator
Best Tech Tools for Apartment Locators
Check out our Career & Industry blog for more information about careers in real estate.
Interested in Apartment Locating?
Whether you arrive as a newbie, a seasoned real estate agent, or an experienced locator, AptAmigo offers some of the best commission splits in the industry. If you want to build your own business in real estate, consider joining our team.
Find out why buy-sell agents are becoming apartment locators.
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