Different Rental Levels on the Market
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 is deplorable for several reasons:
1. It inflates already high rental levels on the market which shuts out many tenants from the market all together.
2. The landlord 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.
4. The landlord is assessed taxes on income that never makes it to his/her pocket. The landlord's rental income is assessed at SEK 18.000/month, not the actual SEK 15.000/month that they receive. More about taxes on sublets
Of course, we do not work for free either. Milton Friedman said there is no such thing as a free lunch. However, we do believe that there is a better way by offereing a transparant model that gives both parties the possibility to buy add-on services by desire/need. As a landlord, you can advertise for free but if you need assistance with the lease, you can buy that add-on service-if you want. As a tenant, if you want to buy an inspection of the property to protect your deposit you may buy that add-on service-if you want. We have faith in the market and believe that most people truly value a real estate agent's expertise. We have worked according this model since 2012. We strive to offer a model so that you only pay for what you need without hidden costs.
Free estate agents?