At Rental Beast, we believe in the long-term power of rentals. Here’s why: 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 should be an important part of an agent’s business, and that current renters are likely to become future homebuyers. However, as brokerages and real estate agents adjust to the changes brought on by COVID-19, rentals are proving to be even more important. It’s not just business-as-usual for the home sales market, and, while the rental market undergoing some changes of its own, building rentals into your business plan is especially important right now.
Rising levels unemployment and an economy in jeopardy have caused consumers across America to tighten their wallets and practice risk-averse spending. Even for those still employed, a pervasive feeling of uncertainty and economic unease makes sure that Americans prefer to save, rather than spend, their money.
Renting provides flexibility and affordability appealing to skittish consumers, especially millennials— many of whom work in the gig economy, are saddled with student debt, and still traumatized by the 2008 recession. And, somehow, millennials are still-hopeful ready to find a new apartment! At Rental Beast, we syndicate our listings across the web and we have found no significant decrease in inbound rental inquiries. According to a March 18-26th survey conducted by RentCafe, 56% of renters plan to move once they’ve found the right apartment, while only 8% report that they’ve completely stopped looking for an new unit.
Real estate agents make the process even safer for clients. As local experts and client advocates, you actively help clients make the best decisions possible for their future. Participate in this risk-averse economy by helping eager renters find their perfect home.
2. Apartments are getting nicer
And, renting provides some serious lifestyle benefits beyond economic optics. With a surge of popularity in luxury properties, and the highest percentage of high-earners choosing to rent, apartment buildings are offering some seriously appealing amenities to woo tenants, including private dog walks, fully equipped gyms, and full-service concierge services.
Many in the market for a luxurious home—especially the Baby Boomers predicted to make up are 31% of the rental market by 2035 are opting to dish out their money on an expensive rental, and reap the benefits of increased flexibility, proximity to culture, and the help of a landlord or property owner only one call away.
3. The Rental Market traditionally does well, especially during economic downturns
We all have to reckon with economic realities, so let’s be real about COVID-19’s impact on the housing market. US unemployment skyrocketed as small business struggled to retain their employees in the face of shelter-in-place orders, and the once-robust US economy is already in a recession. There’s a lot that we still don’t know, and we find out new information about COVID-19 and its impact on the economy each day; however, some type of long-lasting economy downturn is looking nearly enviable.
If a recession does come, rentals have historically proved to be a safe-harbor for real estate agents ready to grow their business. The rental market is, for the most part, resistant to the peaks and valleys of the housing market. Forbes Council Member, Aaron Marshall, calls tells landlords that “rental income may be your one steady oasis in a recession.” And we tend to agree.
4. Rentals can be done entirely online
The home sales process is long and multi-stepped and requires an boots-on-the-ground approach. Integral part of the home sales process, like home inspections, cannot be done online, and will be tricky to accomplish now with sweeping stay at home orders issues around the United States.
Leasing transactions, on the other hand, are much simpler and totally possible to complete from the comfort of home. With search portals optimized for real estate agents use, virtual showings, digital CRMs, and online application engines, real estate agents can be ready to close rental deals.
5. Renters today, homebuyers tomorrow
Rental clients are likely to want to buy during some point in their lives. This is true during any economic cycle, but is especially important now, as many would-be homeowners have pushed off purchasing a home due to economic concerns.
When the economy recovers (and, it will, eventually!) renter clients will 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.
6. Landlords want to work with agents (and agents should want to work 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 any recessions and slow seasons by providing you with a reliable stream of housing that you can offer the majority of renters who have decided to forge forward with their planed, uninhibited by COVID-19. Plus, as landlords work to ensure their properties report low vacancy rates and rent continues to come in, they are offering plenty of concessions to agents ready to get the job done. Build these relationships now, and cash in again and again.
7. Make commission quickly
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.
Rental Beast is the end-to-end leasing platform built to simplify the leasing process for all participants, and we help real estate agents of all experience levels develop lasting relationships with renters and conquer the rental market. With a database of apartments with virtual showing capacity and free education, we stand ready to help you grow your business and carry on. You can start with free education about all things rental: Get free resources from Rental Beast University.
2 thoughts on “The Rental Market Matters Right Now”
I have a landlord group with 40,000 landlords who are worried how they are going to pay mortgages with renters that can’t pay. I believe the pandemic has effected landlords the most. Yes, they can do a lot online but theres not much they ca do online if they do not have paying renters. Very inetersting article though. The numbers are interesting though. By the way I have used your service before and really enjoyed it. I didn’t realize you had a blog. Great stuff!!