How do real estate agents make money on rentals? People often ask me this question.
Many people think realtors only earn when they sell a house. But in Canada, rental properties are also a strong source of income for real estate agents.
However, it’s not as simple as it sounds. Every province has its own rules, fees, and payment methods.
In Canada, landlords pay real estate agents when they help rent out a property.
The payment is a commission, which is often a percentage of the first year’s rent.
Two agents typically share the commission—one represents the landlord, and the other helps the tenant find a place.
If you want to know how much realtors earn on rentals or if agents get paid for helping tenants, you’re in the right place. I’m going to share a guide that explains how realtors generate income from rentals in Canada.
Keep Reading.
Do Real Estate Agents Earn from Rentals?
Yes, they do! But it works a bit differently from selling a home. With rentals, the commission is usually smaller, and how it’s paid can vary depending on the province. Still, many agents make a regular income from rental deals.
Landlord vs. Tenant Payments
So, how do real estate agents get paid for rentals? It depends on where you are in Canada.
- Ontario: Since 2020, only landlords can pay the agent’s fee. Tenants aren’t allowed to be charged.
- British Columbia (BC): In places like Vancouver, it’s common for the landlord and tenant to split the fee 50/50.
- Quebec: Landlords usually cover the commission, but the amount is generally lower compared to other provinces.
Commission Models
There are a few ways agents earn:
- Percentage-Based: A cut of the total rent, common in Quebec.
- Flat Fee: A fixed rate per rental—popular in Alberta and Saskatchewan.
- One Month’s Rent: Very common in cities like Toronto and Vancouver.
Renewal Income
Here’s a bonus—agents can also get paid when a tenant renews their lease. Many build a renewal bonus into their contracts.
So, even after the tenant moves in, the agent can earn money each year the lease gets renewed.
Understanding Rental Commission Structures in Canada
Let’s get into the details of how real estate agents get paid for rentals. The structure changes depending on the province.
A. Standard Payment Methods
- One Month’s Rent: This is the standard in Toronto and Vancouver. If the rent is $2,500, the agent earns $2,500.
- Percentage of Annual Rent: In Quebec, agents might get 8-10% of the total yearly rent.
- Flat Fee: In Alberta and Saskatchewan, landlords pay a fixed fee, often between $1,000 $1,500.
Who Pays the Agent?
| Province | Fee Payer | Key Rule |
| Ontario | Landlord | Tenant-paid fees have been banned since 2020 |
| British Columbia | Split (50/50) | Tenants often pay half, especially in Vancouver |
| Quebec | Mostly Landlord | Lower commissions (8-10% of annual rent) |
If you’re planning to join a real estate brokerage, understanding these fee structures is crucial. As a real estate agent, knowing these details helps you set expectations and make better choices when picking a brokerage.
How Much Can a Realtor Make Per Rental Deal?
Let’s talk numbers. A common question is: How much do real estate agents make on rentals?
While it’s not as high as home sales, rental deals can still be quite profitable, especially over time.
Commission Averages
Here’s a quick look at what agents can earn in different cities:
| City | Avg. 1-Bed Rent | Agent’s Earnings (One Month’s Rent) |
| Toronto | $2,500 | $2,500 |
| Vancouver | $2,800 | $2,800 |
| Montreal | $1,700 | $1,360 to $1,700 (Percentage-based) |
Factors That Increase Earnings
- Luxury Properties: Higher rent = higher commission.
- Longer Leases: A two-year lease might double your fee.
- Renewal Clauses: Agents can earn again when tenants renew.
Now you can see how much commission a realtor can make on rental property—and how they build steady income through multiple leases and renewals.
Once you’ve bought your home, there are key things to consider after buying a house, such as maintenance and budgeting for future expenses. Agents may still earn a percentage of the rent, but the market might be less competitive.
Beyond Commissions: How Much Do Real Estate Agents Make on Rentals
People ask: How do realtors make money off rentals? It’s not just about the initial commission. There are also other ways real estate agents make money on rentals that you might not know about.
They typically earn commissions on rental deals, charge fees for additional services such as property management, and assist tenants with lease agreements.
A. Lease Renewal Bonuses
When tenants choose to renew their lease, agents can earn 25-50% of their original commission again. It’s like getting a mini-bonus for keeping the tenant happy.
B. Property Management Side Income
Some agents also manage rental properties. They typically charge 8-12% of the monthly rent for this service. For example, managing a $2,500 property could bring in $200 to $300 each month.
C. Ongoing Work
Once a realtor builds a relationship with a landlord or tenant, they can continue to make money by helping with lease renewals or future rentals. This steady flow of clients can help realtors earn a reliable income.
C. Add-On Services
- Tenant Screening: Agents can charge $100-$300 to screen potential tenants.
- Professional Photography: Offering high-quality photos can earn an extra $200-$500 per listing.
So, how does a real estate agent make money on rentals? It’s not just about the commission—they can earn through renewal bonuses, property management, and even offering extra services like tenant screening and photography. To effectively grow your real estate business, real estate marketing on LinkedIn is essential. Discover proven strategies to reach your target audience and drive more business
Know The Truth About Tenant vs. Landlord Fees
Let’s clear up some common myths. Who pays the real estate agent?
1. Ontario’s Tenant Protection Rule
Since 2020, it’s illegal in Ontario to charge tenants rental agent fees. Instead, landlords are responsible for covering the full cost of the agent’s commission.
2. BC’s Competitive Market Reality
In Vancouver, it’s common for tenants to pay half of the agent’s fee, even though it’s not required. The rental market is competitive, so tenants are often willing to chip in to secure the best properties.
3. Quebec’s Lower Commission on Culture
In Quebec, commissions are typically smaller. Instead of a full month’s rent, agents usually earn 8-10% of the annual rent.
These differences are important to understand, especially if you’re planning to get your real estate license. Each province has its own rules about who pays the agent’s fee.
How to Maximize Your Rental Income as a Realtor?
If you’re wondering how realtors make money on rentals, here are a few tips to boost your earnings and make the most out of rental deals.
Top Strategies
- Target High-Demand Areas: Focus on cities like downtown Toronto or Vancouver condos. These areas have higher rents, which means bigger commissions for you.
- Offer Lease Renewal Packages: Include renewal bonuses in your deals. This way, you’ll continue earning money when tenants stay longer, ensuring steady income over time.
- Upsell Property Management: Offer property management services. Managing rental properties can bring you monthly passive income from 8-12% of the rent.
- Build Relationships with Landlords: Establish long-term partnerships with landlords who have multiple properties. This can lead to repeat business, with you handling several rental deals at once.
You can also use platforms like LinkedIn to market your real estate services and attract more rental clients. The key is to tap into different income streams to maximize your earnings.
Building a strong brand is crucial for success. Learn more about effective strategies on how to brand yourself as a realtor. It helps you stand out and attract more clients.
Renting Across Canada: How Do Real Estate Agents Make Money on Rentals?
Do you know how realtors make money on rentals? The way real estate agents earn money on rentals varies across Canada and depends largely on the local market.
While the core of how agents make money stays the same—by earning a commission on rental transactions—there are some key differences from city to city.
Agents typically help tenants find rental properties or assist landlords in filling vacancies, and they earn a percentage of the rent as their commission.
However, depending on the location and the demand in the area, the amount they earn can differ, and so can who pays the commission. Here’s a breakdown:
Big Cities (e.g., Toronto, Vancouver):
Agents often earn 50% to 100% of the first month’s rent as a commission. Landlords usually pay the commission, but in some cases, tenants might share the cost.
Smaller Cities (e.g., Calgary, Ottawa):
Agents may still earn a percentage of the rent, but the market might be less competitive. They might also supplement their income with property management services, such as screening tenants or maintaining rental properties.
Rental Market Conditions:
In cities with higher rental demand and tight inventories, agents may make money more quickly with shorter-term leases. While in cities with a steady demand for rentals, agents could earn from long-term deals or repeat clients.
Other Services:
Many agents also charge additional fees for tenant screening, lease renewals, and paperwork handling, which can add up over time.
Real estate agents use their expertise in the local rental market to simplify the process for both tenants and landlords.
This allows them to ensure they earn their fair share while providing valuable service to all parties involved.
Before you can begin working as a realtor, obtaining your real estate license is a must. It’s crucial to be familiar with the steps. Get the full details on how to earn your license.
Conclusion
In short, real estate agents make money on rentals through commissions, usually 50% to 100% of the first month’s rent. In larger cities, landlords typically pay the fee, but sometimes tenants share the cost.
Agents can also earn by offering property management services like tenant screening and handling leases, which come with extra fees.
Some charge for lease renewals or helping tenants find new rentals. By building strong relationships with landlords and tenants, agents can earn from repeat business. Their income comes from a mix of commissions and added services, depending on the market.
Check another blog on the impact of sprawl on housing affordability, as expanding suburbs worsen the housing crisis and create more demand in already competitive markets.
