How much money do you make? This is a question that is asked by virtually everyone who is interested in becoming an apartment locator, and for good reason. You want to know if it is a viable income source, and if you will be able to pay the bills. Because this has been asked so much I decided it would be best to go ahead clear the air around this question so that everyone considering becoming an apartment locator will know exactly what to expect.
What I am not going to cover in this article, is the cost of being an apartment locator. Reason being, is because the article would be too long, so I thought it would be best to split the article up into two separate sections.
The link to see how much it cost to be an apartment locator is provided and I would highly recommend you check it out because knowing how much you will have to spend to be an apartment locator is just as important as knowing how much you are going to make.
“You can’t have million-dollar dreams with a minimum wage work ethic.”
The nuts and bolts of the apartment locating transaction
Apartment communities will pay apartment locators in two main ways.
- Pay by percentage of a month’s rent, for example: 100% property will pay 100% of the monthly rent.
- $1200 monthly rent X 100% = $1200 commission check
- Pay by flat rate, for example: A flat rate of $250 will be the commission regardless of the rent.
Now that you know the commission structure of an apartment locating transaction, you can better understand how you the agent would earn money.
As a real estate salesperson, you have to license under a broker. Just like an apprenticeship program. These brokers typically will take a portion of the transaction that you close. There are two main types of broker sponsoring formats. Independent and Traditional
Traditional: Working for someone else
You would be working for an apartment locating firm like ProMove, Umovefree, or Findit. There are tons of apartment locating companies out there and their splits vary.
With companies that offer the free move or larger rebate incentives you are typically going to land around 25% of the initial commission on the leads they provide.
Example: $650 average commission – $250 move or rebate = $400 X 40% = $160 (net commission to you)
Other companies that do not have an incentive will allow you to make up to 40-50% of the transaction on the leads they provide.
The reason I added the caveat of “leads they provide”, is because in order to work for them they require you to work a certain amount of their leads. This will be both yours and their primary income source.
You are permitted to work self-generated leads, and you’ll typically earn up to 70% of the commission.
Independent: Working for yourself
When I say “work for yourself”, what I mean is you would be an independent contractor working for a broker sponsor like Spirit Real Estate Group. You would still have a broker to work under, however the big difference is you would be working for yourself.
In most cases you are responsible for providing your own leads. Some broker sponsorship programs do have leads available, but not many.
However, the big benefit of working for yourself is going to be that you can typically earn 100% of the commission. You get to determine whether or not you want to offer a rebate.
So now that you have seen the difference in the two types of broker structures, in comes the elephant in the room,
How big is the average commission?
A very large majority of apartment communities pay by a percentage, and really the commission varies from market to market, and area to area.
Downtown Dallas for example, has an average rent of a 1 bedroom around $1400. The most common commission in the downtown area is 100%. So, for a one bedroom, your average commission is going to be about $1400 in this area. The rest of Dallas is predominately 50%, and the average rent for a 1 bedroom is going to vary from as little as $500 to $1000 depending on the demand of the area.
If I was going to put an average commission on the transactions we do, I would say it was around $900 in the Dallas Fort Worth area. But, it can go up or down depending on the market that you are focusing on. Also, a majority of my agents focus their attention on those higher income potential areas and markets.
Really there is no clear answer to say you can make “X” amount as an apartment locator. You will get out of it exactly what you put into it. Some agents that work for the bigger apartment locating firms earn between $20k per year up to $80k per year being the top salesperson.
But, with working as an independent contractor, your income is only limited by your work ethic. You can make as little, or as much as you like. I have one agent that cleared over $10k last month, and that was with 8 transactions. Her primary area is the downtown Dallas area and her average commission is well over $1000.
“Opportunity is missed by most because it is dressed in overalls and looks like hard work.” -Thomas Edison
Independent Contractors are also not limited to just apartment locating. For more information on that check out our article: “Can you be an apartment locator and a Realtor?”