How is brokerage on a rental property decided?

Brokerage on a rental property is decided by agreement between the broker and the client, and it is commonly one month's rent or half a month's rent per side, depending on the city.

Common Practice

• In many cities, the tenant pays one month's rent as brokerage, and sometimes the owner pays too.
• In some markets, each side pays half a month's rent.

What Influences It

• Local market practice, the broker's services, lease length, and rent level affect the amount.
• Long leases and high rents may allow negotiation.
• Remember that commission rates for resale deals differ, and that some brokers charge a flat fee instead of a percentage.
• Check that tax is applied properly on the commission, and ask for a certificate of tax deducted, since you will need it to file your own return.

Practical Tips

• Agree on the brokerage before viewing properties, and ask for a receipt.
• Negotiate where possible, especially if you find the property yourself.
• Check that the broker is genuine, and pay brokerage only after the agreement is signed.
• Compare services offered, since a broker who handles documentation and follow-up may justify a higher fee.

Treat rental brokerage as negotiable, and agree on terms upfront. Keep proof. Keep proof of every lead and every visit. Take your time, and verify each point.