Many agents overlook the rental market and focus entirely on homebuyers and sellers. Although the commission today might be smaller, adding a specialty in rentals can provide you with a quality source of homebuyer leads over the long term.
A whopping 35 percent of the U.S. population rent their homes, and the demographics of this group mean they are very likely to become homebuyers in the near future. Here are a few groups to focus on when incorporating rentals into your real estate operation.
Families putting down roots
Many families move away from renting as their size grows, especially in markets where it’s difficult to find single-family homes and other larger rental properties.
These families often rent in more urban areas until it is necessary to seek out neighborhoods with good school districts and proximity to family-friendly entertainment. They are also looking to minimize their work commutes for as long as possible before moving to a more suburban environment.
Eventually, they make the choice of homeownership to provide roots for their children and to gain access to equity instead of spending money on rent. As an agent, great service provided to them now can pay dividends down the road when they make the decision to purchase.
Professionals advancing in their careers
Many of today’s renters are just getting started in their chosen fields of work and often choose renting for the flexibility and low cost. As they move up the career ladder, they see an increase in their incomes and often their job security.
As this happens, they will inevitably move into a larger home to enjoy the fruits of their labor or settle down in a more permanent location after they’ve been working for the same company for several years.
Renters exploring neighborhood options
A neighborhood might look nice during an open house, but the only way you can truly understand what it’s like to live there is to spend day-to-day time in the area.
Some renters are exploring options for their permanent home. They immerse themselves in a particular neighborhood to find out whether it matches what they were expecting, what the commute is actually like and how easy or hard it is to perform errands.
These renters are almost ready to buy; they’re just not sure exactly where they want to go yet. By working closely with these renters, you can find the perfect neighborhood for their needs and be a trusted resource when they decide to buy locally.
Life stage changes
When people get married, the likelihood that they’re going to purchase a house soon increases. The Joint Study for Housing Studies of Harvard University found that 80 percent of married couples own a home versus the 65 percent of the total population referenced above.
Recently married couples who are renting are often just a step away from starting their home search.
Generational trends in homebuying
Homeownership numbers are highest in the 45- to 65-year-old demographic, according to the National Multifamily Housing Council, but the most active homebuyers aren’t necessarily within that age range.
Older millennials and Gen Xers have the highest home purchasing rates, with the National Association of Realtors reporting millennials at 32 percent, the highest of any group, while Gen Xers made up 27 percent of buyers.
These two groups dominate the rental market today, but demographics suggest their move toward homeownership has begun.
To the aggressive and forward-thinking agent, the rental market is filled with people who are planning on buying houses soon.
Whether you decide to look for families that want to create a long-term foundation and skip frequent moving or a newly married couple buying a house so they can move in together, you can expand your potential homebuying clientele by adding rental properties, property management or leasing to your arsenal.