Is it worth my agents or my time working with Lower Dollar Rental/Lease Clients?
My company has been getting a ton of lower dollar amount lease leads over the last few months. Im sure this is due to the economy and people having to downsize. In an effort to not continue throwing away current and potential leads i wanted to see if it was worth my agents time and effort working leads given for lease deals under $1200 a month. Our company has a basic 60/40 split for leads provided and up to 80/20 for agents that generate their own leads.
- On a $1200 lease with 50% commission it would be $600 - $50 = $550 x 60% = $330 to you (current)
- On a $1200 lease with 50% commission it would be $600 - $50 = $550 x 80% = $440 to you (proposed)
- On a $1000 lease with 50% commission it would be $500 - $50 = $450 x 60% = $270 to you (current)
- On a $1000 lease with 50% commission it would be $500 - $50 = $450 x 80% = $360 to you (proposed)
$1200 Lease Details at 80/20:
Thats $110 more on a $1200 lease! So if you spent 1 hour in phone time and emails and 2 hours actually showing these homes thats 3 hours of work or $147 per hour. I feel that with a good upfront pre-qualification that you can spend a total of 3 to 5 hours of actual work helping this type of client. If they dont want to play by your rules than cut them and move on. If you spent 5 totals hours showing, emailing and calling this client you would still make $88 an hour if they leased. If you spent 8 hours or 1 full day you would still make $55 an hour as it stands. So what is your personal cut off point, how much is your time worth per hour? "Average salary for a lawyer with 1-4 years experience is $22 to $50 per hour"
$1000 Lease (Is it Even Worth It):
Iif you spend 1 hour setting up portal, email and phone time upfront and 1.5 Hours on two different days showing houses that is 4 hours of your time. You would be at $90 per hour working on a $1000 lease. If you spent 6 hours total working time between emails, phone and showings you would be at $60 per hour for your time. How much is your time worth per hour? "Average salary for a lawyer with 1-4 years experience is $22 to $50 per hour"
What if you specialized in $1000 Lease Clients?
If you agreed to dedicate no more than 5 hours on average total working time to each $1000 lease lead that you personally prequalifed and assuming 45% lease commission (real statistic based on our teams last year production) and also consider that you may be able to get a few 100% apartment deals which may bring the statistic at least back to 50% commission average (STAY WITH ME HERE). So on our new plan $1000 lease with 50% commission would be $500 - $50 = $450 x 80% = $360 to you / 5 hours of your time = $72 per hour. Assuming you work just 45 hours per week that total would be $72 x 45 = $3240 a week if you spent 30 minutes pre-qualifying and up to 4.5 hours showing and submitting apps! This is very realistic as I have done 3 deals with less than 2 hours of actual work in the last 3 months. Based on that number if you took all the low $1000 lease leads pre-qualified them and only dedicate on average 5 hours per client (some may be easy 2 hour deals some may be 8 hour deals) you could make $72 per hour or $3240 per week which is $12,960 per month or $155,000 per year just specializing in $1000 lease clients. To be even more fair lets just say if after pre-qualifying and showing you only had 50% approval/closing ratio on lease applications so only 5 out of 10 clients you pre-qualify and show homes to get accepted at the $1000 rental they apply for. So if with all your efforts you only got 50% of your people approved for $1000 leases you could potential still make $1620 per week $6480 per month or $77,760 per year just working with $1000 lease clients spending 5 hours on aveage actually working with them. Thats creating a system that allows us to close 4 $1000 lease leads per week. Judy has closed 5 in one week over $1000 with no system or method in place.
The average salary of a Family Physician (doctor) is $73 according to . If you specialized in $1000 rentals and only closed 50% of your actual clients you could make what an average lawyer makes per hour but without having to go to law school or have set hours. If you could close a high ratio of $1200 leads than you could make more than the average Family Physician that had to go to Medical school. Im not trying to push people either way but I thought the numbers spoke volumes when I started actually doing the math.
I wanted to do this math and be as non biased as possible and I can say that I personally had a personal client that I leased a $1000 place to less than a month ago. After seeing the math and the numbers I think that is a great market and that agents/realtors have just become to snobby to want to help those that need it the most.
For more details go to www.RentRehab.com or www.DallasLuxuryRental.com both of these websites specialize in Dallas, Plano, Allen, Richardson, Frisco, McKinney, Prosper, Little Elm, Carrollton, Preston Hollow, Highland Park, Lakewood, m Streets and other Dallas, Denton & Collin County lease to own, rent to own, & owner finance properties
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