The majority of Gen Zers and Millennials are still renting properties. In fact, it is projected that 59% of all households forming between 2010 and 2030 will rent*. Even though renting will continue to grow, most households still have a strong desire to purchase a home but are either:
- Not in the financial position to buy, or
- Are unaware that buying is a viable option
These days, the low for-sale supply (at its lowest since 2003**) is putting up even more barriers to homeownership than usual.
All of this puts rentals at the forefront and underscores how critical it is for agents to foster relationships with renters now more than ever. By working with renters/rentals, agents can still generate income on rental commissions while simultaneously increasing their pools of buyer and seller leads. Most agents who successfully leverage rentals follow three simple steps.
Step One: Cultivate rental activity
No agent will have success leveraging rentals to boost sales without first building a strong and efficient rental business. Efficiency is absolutely crucial because too much wasted time on a rental transaction will quickly sap vital hours for productivity.
Starting from scratch, some of the most effective methods for generating rental activity are through:
- Volunteering to sit rental open houses for colleagues. This will put you in contact with potentially dozens of renters who are still looking for a place.
- Pouncing on inbound renter leads. Don’t shy away from any renters who come to you/your brokerage looking for assistance.
- Advertising rental/leasing services. Most agents don’t take this approach so you’ll differentiate yourself right off the bat.
The key mindset for all interactions is to treat each renter like a future buyer. And to provide an excellent experience from start to finish that can create a long-lasting relationship.
Most rental consumers are more technically savvy and will expect digital services as part of the rental process. Using something as simple as scheduling/showing software can really make a difference to consumers while saving hours of time. Many consumers also strongly prefer an automated rental application and screening software like RentSpree’s tenant screening tool. This has the added benefit of getting applicants qualified in minutes instead of days.
Step Two: Track leads with a CRM
While working with renters, agents end up learning much more than they would during normal interactions. Most of this information is useful and can be leveraged later on using a CRM (Customer Relationship Management) tool. For instance, why not make note of the lease term and set a reminder to reach back out to the renter when the lease is almost up? This is a perfect time to check in because the renter is highly likely to make a housing change.
In addition, agents usually also pick up information about renters’ location or home size preferences, all of which is valuable information to add into a CRM to help with outreach later on.
Step Three: Provide a path to homeownership
After settling in, most renters shift to different mindsets depending on their personal characteristics and financial situations. This mindset really comes down to three questions:
- Is now a good time to buy? (timely)
- Does buying make financial sense for me? (prudent)
- Is buying feasible given my means? (viable)
A good agent can often help the renter make informed decisions on each point.
For instance, sharing relevant market statistics and trends can show renters when might be a good time to buy. And a simple rent vs buy calculator can illustrate how much money a renter stands to gain in purchasing a home vs continuing to rent. Finally, sample loan information and programs can help a renter understand that buying is a real possibility.
In conclusion, the rental market is booming and working rentals, if done correctly, is one of the few (if not only) lead-generating activities that earn income for agents as they go.