Here at Rental Beast, we’re dedicated to simplifying the whole leasing process for real estate agents and allowing them to make money with rentals while building a robust book of first time homebuyers. Working with renters requires an good outreach plan, but, for some renters, the jump to homeownership happens at a quick pace.
When renting with the intention to buy, it can be helpful to advise your client on the steps they can take to capitalize on their renting time and preparing themselves to buy. Check out a few reasons why a client would rent while looking to buy and what steps they can take to better prepare themselves to make the leap into homeownership.
3 Reasons Why A Client Might Rent While Looking to Buy
Limited inventory
In competitive real estate markets were homes get snatched up quickly, renters might stay renting (or opt to move into a rental instead of a home) because they’re unhappy with what’s available for their budget. In this case, renting might provide a temporary solution and even be preferable to compromising on budget or wishlist when buying a home.
Credit
Credit is often the biggest challenge that would-be homebuyers face when they are trying to find a new home. Real estate agents can broach the subject carefully and delicately by informing the client that their rental application requests a credit score and ask if there will be any issues around providing that information. Because credit score requirements are often lower for apartments, many clients might opt to move into a rental as they build credit to get their scores to a place suitable for homeownership.
Down Payment
If your biggest roadblock to buying is the down payment, you’re not alone! Although the idea that you need 20% for a downpayment is incorrect, many clients might not have the large chunk of cash needed to put down any downpayment. Instead, those who can’t access that sort of money might opt to live in an apartment while they earn and save money.
3 Tips to Rent While Looking to Buy:
1. If your renter is facing limited inventory, target a month to month or short term lease.
If the renter will make the jump into homeownership in the near future and is held back by the lack of appropriate homes on the market, make sure they’re in a situation where, when the right homes arrives they’ll be able to move in quickly.
If your client contact you Inventory can change very quickly and you want to have the flexibility to move when the right house comes on the market. If you have already been in your rental for quite some time you can talk to your Landlord about switching to a month to month agreement at the end of your lease. The Landlord will still want 30 days notice and the ability to show your apartment, but if you have been a solid tenant for them they may be open to this.
If your client knows that they will be buying a home soon, make sure to target a month-to-month lease or short-term lease option. Additionally, keep your eyes open for furnished units. A renter might want to look for a furnished rental so they don’t have to deal with moving furniture in and out for only a short period of time.
2. If your renter is facing poor credit, they’ll need to pay their rent and bills on time.
If your client is renting due to poor credit or lack of credit they will need to get their credit score in shape before buying a home or locking in a mortgage rate. Every 20 points that they raise their credit score will make a difference in the rate that lenders offer them.
In a rental, they can take the time to work on their by paying their rent on time, paying down debts, and paying their credit card on time and in full each month. Building up credit can be difficult, but is pretty necessary to get into a house!
3. If your client is low on cash, suggest living with roommates or choosing a lower priced rental
The key here is to get your client in a position where they can save as much money as possible. So, perhaps they should adjust their budget and expectations. Or, suggest a roommate that they can split the cost of living with. Or, even better yet, try to get a low-priced apartment with a roommate! This way, your client can continue to save money for their dream house!
We want to make the rental process— from lead generation to lease signing— simple and profitable for real estate agents. Rental Beast subscribers can take advantage of our database of over 7 million listings not found on the MLS and our suite of tools designed to help you generate leads. Our full CRM includes automatic outreach plans designed to help you build consistent relationships with your clients, and successful capture the business of the first time homebuyers. Rental Beast helps agents boost their productive, further their 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.