It's a given – dealing with rental properties can provide income and future clients for savvy, open-minded agents. Inman News ran an interesting article recently, highlighting just this point. Remember, it's all a matter of how you think – we're in a make-it-or-break-it economy, and if you're smart, you're scrambling to not only use but create best practices to put yourself at the head of the pack.
Rentals have BIG potential as a new money-maker for real estate professionals. By 2015, the nation's home ownership is projected to drop from about 66% today, to 64% - the same rate as in 1968, said David Vivero, CEO of RentJuice, which provides online rental relationship management software to real estate professionals.
Vivero noted that while that drop may seem small, it represents more than 10 million people who will go from being home owners to being home renters. For real estate professionals, that means by 2015 there will be 4.3 million more rental units and 1.8 million fewer owned homes; 463,000 homes sales will be lost, worth $2.4 billion in commissions; and 150 million leases will be signed, worth $6.8 billion in commissions.
"If you offer only sales, (a total of) $11 billion in commissions (will be) out of your reach," Vivero said.
So that's the “not very happy” news. Real estate agents and brokers would do well to remember that renting is often a stepping stone to home ownership. Agents can use a rental practice to provide exposure to renters, and to landlords who may decide to buy more properties in the future.
"Renters may turn into homeowners; prove yourself early," Vivero said. "No one's born 35. Between 22 and 35, they're renting."
You're right if you complain that commissions from leasing rental properties are smaller than those from sold homes. But, as Vivero said, they do provide "a steady income stream" that "[can] help keep frustrated agents afloat." If you're thinking of handling rentals, your best first step is to "simply just put content out there and hang a shingle as a rental service," he said.
Keep in mind the fact that the multiple listing service cannot be your only strategy when marketing to "Generation Rent," Vivero said. The marketing is different. Given demographics that skew toward younger singles, school statistics and mortgage calculators are likely to be less effective than a focus on lifestyle factors such as commute times and nearby amenities, Vivero said.
It's time to diversify your thinking if you're going to stay in the game. Leave your comments below and tell me…What do you think about handling rental properties?
Talk to you soon.
Coach Patti
About Coach Patti Kouri:
Coach Patti, the owner of Accelerated Performance Coaching Inc., and The Real Estate Game®, strives to maintain an atmosphere of community, connection, and harmony by becoming your resource base to enhance and enrich your personal and business life. Coach Patti was voted one of the ‘Top 50 Most Influential Women In Real Estate Leadership in 2008’ by the 2008 edition of the Swanepoel Trends Report. www.CoachPatti.com and www.TheRealEstateGame.com.
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