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Rentals No Longer Real Estate’s Red-Headed Stepchild

  • November 1, 2011

by Erin Calandriello

Rental Building in Chicago

As the economic crisis has taken its toll on the pace of home sales, rentals have grown in popularity and are now accounting for a significant chunk of the revenues for Chicago real estate brokerages.

In the past, Baird & Warner’s Kay Cleaves said that the rental market was served largely by inexperienced agents and was looked at with “disdain” by established brokerages.

“Rentals were the red-headed stepchild of real estate,” Cleaves told UrbanTurf. “In a large brokerage, [these transactions] often fell to the newest agents or to agents who weren’t earning enough on the sell-side and needed to pad their income.”

Now, Cleaves said, the strength of the rental market is changing that perception. Seminars focusing on rentals are well attended, more qualified agents are handling rentals, and agent training is being offered in regards to rentals.

Koenig & Strey’s Janelle Gordon said that the rental market makes up probably 30 to 40 percent of all real estate companies’ revenues these days due to the downward cycle in the marketplace.

“I don’t think that rentals are being treated all that differently,” she said, explaining that many of her firm’s clients are not in a position to sell if they paid a premium for their property during the housing boom. So, they’re opting to rent out their home and find another space to lease until they can sell. “Many agents are accepting these rental opportunities to help their clients.”

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