Why we will not rent your home and sublet it
We get daily calls asking about why our rental levels for the same properties are lower on our site vs other rental sites in Sweden. The answer is simple: We simply do not inflate rental levels to fund our business model. There is a trend on the Swedish rental market to provide "free" services to both tenants and landlords by taking a cut of the monthly rent. We feel the practice/model has questionably ethical and legal ramifications for several reasons:
1. It inflates already high rental levels on the market which shuts out many good tenants from the market all together.
2. The landlords do not get services that are in relation to the add-ons to their rent. For instance: if a 1-bedroom apartment rents for SEK 18.000 per month and the landlord gets SEK 15.000 per month after the letting agent has taken their cut, have they really received services for SEK 3.000 that month? Has the tenant that is paying the inflated rent really received services for SEK 3.000 that month? We think not.
3. The only way for letting agents to work according to this model is to be the contractual party and then sublease to the tenant which essentially puts the letting agent in the role of being both a landlord and a tenant. We see two problems with this: Whose interests do the letting agent represent? We think only their own and the rental law for privately owned properties put these type of third party subleases into the predicament of having different notification periods. A hot mess if there is a conflict of notification periods. Our FMI that regulates all rental agents on the market has now said that this is unethical as well and agents that practice this have begun to lose their license. See the ruling here!
Our Supreme Court has also per 2022-12-18 ruled this business practice to be illegal. Read more HERE
4. We see the model leads to bad will between the tenant and the landlord when both parties realize that a large chunk of the rent is inflated. It results in early notifications when the tenant moves to find something similar that has a lower rental level.
5. Companies are now avoiding agencies which sublet your property due to new immigration rules. Essentially, if their employee is seeking permanent residency in Sweden, they cannot rent a property from an agency, they lease must be directly with the landlord in order to get his/hers immigration approved.
6. After the rental law update per October 1, 2019 the rules changed for not only "hyresrätter" but also privately owned properties. Essentially, when a company rents your privately owned property and then rents it out to their client, the law changes and you and the letting company may be liable to pay back rent that is considered to be too high. There is a reason, despite the practice having been very lucrative for other letting agencies, that we have never considered this business model.
Finally, the relationship between you and you tenant is an important one. Our experience of brokering rentals since 2003 has shown us that the best sublets are the ones that are personal. You are renting your home, it is important that your tenant actually sees you as a person and not real estate company as the landlord. They are much more likely to take care of your home vs. treating it like a hotel. We have faith in the market and believe that most people truly value a real estate agent's expertise and will buy those services that they find of value.