Here at Rental Beast, we like to have all the facts. So let’s take a look at a couple of statistics. A third of Americans, almost half of the US adult population, rent rather than buy homes; the rental market has $12 billion dollars in possible leasing commissions; 57% of all eventual buyers seriously considered renting, while 50% of all eventual renters considered buying. These numbers suggest that rentals can be an important part of an agent’s business, and that current renters are likely to become future homebuyers. From Boston to Tampa, everyone is renting! Why are rentals so popular that we made a whole platform dedicated to simplifying the process? We’re happy to share what’s making Americans move into rentals, and why you should be paying attention to this change in the real estate market.
“It’s the Economy, Stupid”
We all have to reckon with economic realities and the impact they have on our spending. Slow wage growth and a tight lending environment have shut aspiring homebuyers, especially younger ones, out of the sales market. For them, the solution is to become a renter. Don’t wait for economic trends to make a better environment for homeownership! Instead, follow recent trends and think about strategies to capture and work with rental clients.
Building Relationships with Landlords
In a market as fluid as the real estate market, having a partnership with a landlord can be a valuable asset. Becoming a listing agent for a highly qualified landlord with a desirable property can help you weather recessions and slow seasons by providing you with a reliable stream of housing that you can offer your leads.
Structural Demographic Changes
One in every three US adult is a Millennial, and they are three times more likely to rent than any prior generation. The idea that homeownership is a necessary part of adulthood is changing, and commitment-wary millennials prefer renting everything from their homes to their clothing. Also, keep in mind that it’s possible that the Millennial preference for renting will bleed into later generations. Maybe we’ll see similar spending patterns in younger potential tenants, too.
Amenities Are Getting Better
Landlords are taking advantage of the demographic shift of renters by providing clients with luxe amenities to make their properties competitive. Renting is not only a practical solution to economic issues but now is attractive and appealing for potential clients. After all, who wouldn’t want a home that comes with steel appliances, granite countertops, and an open floor plans? Luxury apartment complexes with slick exteriors, gorgeous club rooms, and immaculately staged apartments not only attract tenants but also give you, the agent, a new confidence to show rental units.
A Shorter Time Frame of Transactions
The rental market moves much faster than the sales market. While selling a home might take months, rental transactions take days or weeks to complete. Operating in such a dynamic market does mean diligence, persistence, and flexibility. However, it also offers the opportunity to earn commissions quickly and have a consistent cash flow. For a new agent, this short time frame also means that you can start making money quickly. At the same time, you cut your teeth on the high volume of rental clients and get access to first-time homebuyers. For experienced agents, working with rentals allows you to modernize your business by tapping into a growing segment of the population, and take advantage of rising rent prices.
Working with Rentals Gives You A Pipeline to Buyers
Rental clients are likely to want to buy during some point in their life. When this time comes, of course they want an agent to guide them seamlessly through the process! This transition can even begin during the first stages of your relationship with potential rental leads. While commitment-wary millennials might feel set on renting, buying might actually make more sense for them. Educate them on the differences and dispel myths about a 20% downpayment! Even if they don’t walk out of your first meeting as a buyer, keeping a list of rental clients, and developing a strategic outreach plan, sets you up to receive a dependable stream of homebuyers.
Rental Prices are Rising… People are Still Renting
Just because rental prices are rising, it doesn’t mean that renters and would-be renters will stop renting. Renting is still less expensive for many and is a great low-risk fit for both younger, mobile tenants saddled with student debt, and Americans seeking flexibility in their living arrangements. However, while the number of renters is on the rise, so, too, is their average income. High-income renters are the fastest growing segment of renters. In the last decade, the number of renters looking for luxury apartments has increased by a whooping 175%. The upshot of all of this is that rental commissions are rising. Rentals are becoming more viable for an agent’s business plans.
Renters are here to stay— they are a segment of the population that a real estate agent can’t afford ignore. But we understand what sort of reputation rentals can have. That’s why we started Rental Beast. We want to make the rental process— from lead generation to lease signing— simple and profitable for real estate agents. Take advantage of our database of over 7 million listings not found on the MLS, our suite of tools designed to help you generate leads, become productive, further your real estate education, and close deals faster.
Ready to unleash the beast? To learn more about the Rental Beast platform or to request a no-obligation demo visit Rental Beast for Real Estate Agents.