"I'll Just Rent It"

I have had many agents ask me what thirty years of hearing the same objection over and over again will allow you to do.  My answer is below, but I do have one caveat...you really need to help these people to not make a mistake when they consider renting high priced residential property that was never intended for the rental market.  Here is a recent objection that a coaching client needed help with.

Question:  I have a new objection.  "Our house is no longer for sale because we've leased it out for a year."  How do I come back for that?

Answer:

My response to them would be: "I understand.  Have you signed the lease yet?"

Their response: "No."

My response: "Well, many owners have appreciated my rental analysis prior to to leasing.  Because of negative cash flow, vacancy factor, maintenance factor, and other expenses, many owners find this to be a losing situation.  This situation compounded with lost opportunity cost and the possible further erosion of equity can be a real eye opener.  May I ask you some questions to get the information so I can work the analysis for you?"

Here is the analysis.  Take the rent being paid and subtract 35% for all the expenses of the property except for P and I.  Then subtract P and I from the total.  $3,000 rent less $1,050.00 less a P and I payment of $4,000.00 is a gross negative of $2050. per month.  That is a loss of $24,600 per year. 

Let's say the "one-time seller" had $200,000 equity.  If he could get a 4% return, that is a loss of another $8,000 in lost opportunity costs in a year.  Plus if this $600,000 home lost another 10% in total value in the next 12 months which is the prediction....that is another $60,000 off the equity for a total loss of $92,600 or almost half your equity...and that is only in one year.  This little dip may last 2=5 more years and not look like a V recovery.  It may skip at the bottom for more than 7 years.

Right now we have buyers who are buying.  Why?  Because we loan them our commissions toward their down payment and can take a note against their new property. We market harder.  We keep a great database of buyers.  We have the best SEO strategy.  We use a team approach, and we educate the agents known to have an interest in your area and price range.  We research their names based on their production for the last 3 years and make sure your property is on the top of their showing list.

I would be happy to show you this in writing and also a plan to accomplish your goal (main core value goal).

You now have a script that works when the deadly "I'll just rent it" objection comes up.