When trying to market property to rent, sites like Zillow can reach a lot of prospective renters. If you're considering using Zillow to market your rental property but want to know if they charge a fee, we can help you. We researched Zillow from multiple sources, so you'll know what to expect.
Zillow will allow you to list your first rental property for free for the first 30 days. After that, Zillow charges $9.99 per week to list a single rental property in most states.
In Iowa, Kansas, North Dakota, and Nebraska, the fee is only $4.99. Zillow's Lead Guarantee backs this fee for up to eight weeks.
Now that we know that Zillow charges a fee for listing a rental property, we'll go into more detail about the Lead Guarantee they stand behind. You might also be wondering what Zillow's Rental Manager feature is or how Zillow makes money from listings. For the answers to these questions, read ahead!
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How Does Zillow Guarantee Rental Leads?
Zillow does charge a fee to list your rental property on their platform. The $9.99 per week could add up over time if you cannot quickly find a tenant for your house or apartment.
But Zillow has a feature that will back up their ability to find you a tenant.
The Zillow Lead Guarantee is the company's way of promising you at least one lead the first week your property is listed on their platform.
If you don't get a renter lead within the first week, you will not have to pay for your listing until you do. This guarantee is not definite, as it only is in effect for the first eight weeks of your listing.
Zillow offers specific services to everyone who lists the property on their platform, whether the listings are paid or free. Each account will access online rent payments, digital lease signing tools, and online tenant screening assistance.
How Does Zillow Make Money From Your Listing?
Using Zillow to locate prospective properties has been a free service. How does a company like Zillow make revenue without charging the consumer a fee for accessing the platform?
Indeed there are a lot of expenses for them to cover, creating the need for a high amount of income.
As we mentioned earlier, Zillow does make some money from people that list their rental properties. But this revenue stream is a drop in the bucket compared to the two main methods Zillow uses to be profitable.
Advertising sales to third parties on the Zillow platform is a huge income driver for the company, earning it over $400 million in 2020.
Zillow's Mortgage Origination
Zillow also commits itself to mortgage origination. The company will finance the purchase of a property to a homebuyer, collecting a portion of the closing costs.
Then, Zillow will flip the note to another lending institution on the secondary market.
Doing so gets Zillow some fast money at closing, a little more upon the sale of the note, and keeps the risk of losing money due to foreclosures at an absolute minimum.
In 2020, Zillow was able to earn nearly $175 million in revenue by doing so.
Fees Paid By Agents
Zillow offers free profiles to real estate agents, attracting countless numbers to the platform. Agents have the opportunity to pay for an enhanced agent profile, however.
Many take advantage of this service, as it gives them more opportunity to convert leads to closes. Zillow boasts that these enhanced profiles give agents a significant advantage over the free profiles.
The company claims that agents who pay for extra services from Zillow close twice the number of properties, making the fees well worth to motivated agents.
The fees collected from various real estate agents have been the biggest income driver for Zillow. In 2020, Zillow made $1.04 billion collecting such fees from the agents on their platform.
What Is The Zillow Rental Manager Feature?
Earlier in this post, we mentioned that landlords on Zillow would have access to several tools to aid them in renting their properties on the platform.
The Zillow Rental Manager feature packages these benefits and gives you easy-to-follow instructions on how to best use them to your advantage as a landlord.
The tools in the Zillow Rental Manager feature include:
Applicant Screening
A thorough screening is essential to securing the right tenant for your properties. Zillow makes this process much easier with its applicant screening tools.
Zillow will help you find the right tenant by letting you access an applicant's credit reports, renter history, and criminal records, all in one place.
These screening tools also allow you to verify income for anyone applying.
Once you've screened your renter applicants and selected your best match, you'll want to move to the next step and involve all the necessary paperwork.
Digital Lease Signing Tools
This software eliminates the hassle of paper leases and legal documents. There are leases Zillow offers landlords that attorneys have drawn up, but that can be customized based on rental amount, lease time, specific terms, etc.
And if you have the lease documents you'd use, Zillow will allow you to upload them for use instead.
The lease signing tools will enable you and your tenant to sign documents in a few moments electronically. It also keeps an electronic record for both the owner and the renter.
Online Rental Payments
Waiting for the checks to arrive can be a bit frustrating. And if you are always on the go, you might not be at your business address to collect the rent checks from your tenants.
Thankfully, Zillow offers online rental payments. This is a free service for landlords and free to the tenants who pay using ACH.
Those who choose to pay with credit or debit will incur a small processing fee with each payment.
Can You Get Scammed On Zillow?
Where there are online offers, there seems always to be someone lurking in the background, attempting to take advantage of someone financially.
With horror stories of online scams that dupe unsuspecting consumers out of their hard-earned money, it's understandable why someone might be a little apprehensive about conducting a financial transaction with any company.
With so many listings on their platform, Zillow recognized the urgent need to educate their users about potential scams. They dedicate an entire portion of their website to identifying potential scams, carefully reviewing each sign of a "red flag."
Though no platform offers any iron-clad protection against scammers invading their space, Zillow urges careful consideration from their users who are thinking about engaging in any transaction.
They also encourage any potential source of fraud to be reported to the company and make such reporting easy.
To Wrap Up
Zillow only charges a modest fee for listing your rental properties. Backed by Zillow's Lead Guarantee, you won't pay a dime for the first eight weeks if you don't receive a lead for your property.
While Zillow generates some revenue from this fee, most of its income is derived from fees paid by agents for enhanced profiles and advertising fees charged to third parties.
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