1. What is Rental Commission?

Rental commission is the fee paid to real estate agents or brokers for securing a rental agreement between a landlord and tenant. This calculator helps determine the commission amount based on the rental value and agreed commission rate.

2. How Commission is Calculated

The standard commission formula is:

Where:

• \( Rental\ Amount \) — The monthly or annual rental price
• \( Commission\ Rate \) — The percentage rate agreed with the agent (typically 5-10% of annual rent)

Note: Commissions are often calculated based on the annual rent, even if paid monthly.

3. Typical Commission Rates

Standard Rates:

• Residential rentals: Typically 5-10% of annual rent
• Commercial rentals: Often 5-6% of total lease value
• Short-term rentals: May be higher (10-15%) due to more frequent tenant turnover

4. Using the Calculator

Instructions: Enter the rental amount (monthly or annual), commission rate percentage, and select the rental period. The calculator will show both the immediate commission and annual equivalent.

5. Frequently Asked Questions (FAQ)

Q1: Who pays the rental commission?
A: Typically the landlord pays the commission, though this can vary by market and agreement.

Q2: Is commission negotiable?
A: Yes, commission rates are often negotiable between the landlord and agent.

Q3: How is commission paid?
A: Usually as a one-time payment at lease signing, sometimes split between landlord and tenant.

Q4: Are commissions taxed?
A: Yes, commissions are generally taxable income for the receiving agent/broker.

Q5: What's included in the commission?
A: Typically covers marketing the property, showing to tenants, screening applicants, and preparing lease documents.