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Real estate agents need to realize the role they can play in working with renters, RentSpree’s CEO Michael Lucarelli said Wednesday at Inman Connect Las Vegas.
And Lucarelli knows a thing or two about high home prices and rent.
Lucarelli was a renter living in Los Angeles before recently deciding to buy a home. When looking at what he could afford, he had to expand his search well outside his neighborhood.
“I had to go to the San Fernando Valley where prices are a little more affordable,” he said. “If I didn’t move there, I wouldn’t have been able to afford a home.”
That’s a common experience for renters facing a housing market with record-high home prices and rent near record highs.
Seventy-three percent of renters can’t afford to buy homes in the neighborhoods where they live, according to Jay Parsons, chief economist for rental data firm RealPage.
Lucarelli joined Ryan Frazier, CEO of the fractional real estate investment platform Arrived Homes, on stage to talk about challenges and opportunities in the rental and for-sale markets.
Arrived allows small-time investors to buy shares in long- and short-term rental homes. They then earn dividends based on the monthly rent and long-term appreciation of the homes in which they invest.
At a time when renters want to buy homes but can’t overcome the high prices and mortgage payments made even higher by interest rates, Frazier said Arrived can help them generate a down payment.
“One big reason people cite preventing them from buying is down payment,” Frazier said.
It’s a misconception that young, Gen Z renters aren’t interested in ever becoming homeowners, Frazier said.
“We did a survey recently of 1,100 households, and 87 percent of Gen Z responders said they view homeownership as a really important part of building wealth,” Frazier said. “They do want to get into home ownership but the cost of housing is really tough.”
Lucarelli has been forming partnerships with Multiple Listings Services (MLSs) across the country in an attempt to shed light on the value Realtors can create by working with renters.
He’s been highlighting the need to educate renters about budgeting or saving up for a down payment, as well as the opportunity Realtors have in placing tenants.
“I want our industry to look more at the rental market not as something that’s completely separate and distinct from the homebuying market,” Lucarelli said. “People tend to kind of categorize it as either one or the other.”
“But in reality, you can kind of transition back and forth between the two,” Lucarelli said. “Keep in mind, a renter at some point will become a buyer. How can you position yourself in that life cycle?”