All over the world, there is a demand for purchasing and renting real estate. In many countries like Italy and Sweden, there is a cultural preference towards renting. There are other places in the world, however, that are quickly becoming more of a renter’s market due to other circumstances, like the United States and Singapore. This is based on several factors like rising house prices, stricter qualifications for home loans, and skyrocketing down payments. The economic crisis of 2009 has also left its effect around the globe, displacing many residents from permanent home ownership, leaving them to rent as they fix their credit.
Everyone knows that when an agent represents a tenant then they get a much smaller commission than if he or she closed a sale. Though rental commissions can add up to be a decent paycheck, the real money comes from representing a seller or buyer. How then, in an environment where clients are predominantly renting, can agents make money in a renter’s market? The answer comes in two parts- First, represent landlords, investors, and developers. Second, make the most of your renter clients by nurturing them and encouraging them to become buyers.
Take advantage of a renter’s market by representing builders, landlords, and investors
This powerful triumvirate that lies on the other side of the real estate rental equation is an agent’s way to still represent buyers and sellers in a market where many residents are renting.
- Representing Builders: When real estate agents represent a builder, they give developers the benefit of expert marketing and promotion by listing the builder’s upcoming projects online. This representation gives their projects the exposure and promotion they need in order to sell quickly. Real estate agents can also do the tedious work of obtaining leads and working through the particulars of the sales contract without hassle on the builder’s end. This takes the stress of builders who can then focus on their new constructions without worrying about customer service as much. In the end, the agent gets a nice seller’s commission and developers benefit from selling their new constructions more quickly than if they tried to sell on their own.
- Representing Landlords: Real estate agents can help landlords by helping them buy new real estate for their growing enterprise. Landlords usually like to have many units in order to maximize their profits. This is a good news for real estate agents as well, who can also become property managers, taking a cut of the monthly rent while handling repairs and tenants on behalf of the landlord. If a real estate agent becomes the property manager of multiple units, that is a guaranteed amount of money in their pocket every month that can supplement their income even in slower months.
- Representing Investors: Investors are usually landlords, but sometimes these are purely property flippers who need real estate agents help them find a good fixer-upper. Real estate agents can also guide these investors toward the most lucrative rental real estate where they can cash in with guaranteed tenants in an area with low vacancy. Whether the real estate agent helps the investor towards buying an apartment complex or a home they merely want to resell, this presents a good opportunity for agents to get buyer and seller commissions. Investor-agent relationships can also be long-term, generating repeated business.
Turn Renters into Buyers
Every person you meet as a real estate agent can lead to future business. Current renters, for example, can later on become homeowners. It is wise to keep in touch with these clients and establish a relationship of trust. Add them to your marketing email list and get in contact with them a few months before the end of their lease and check in on how they are doing. Are they interested in pursuing home ownership and the savings involved?
If a client who became a renter has a poor credit score, try connecting him or her with a loan officer you trust who can help guide them toward building their credit. If they are receptive to making adjustments to raise their credit score, keep in touch with them during their lease as they make the appropriate financial adjustments. As their score becomes healthier, you can start encouraging them to explore types of houses they are interested in.
Getting Globally licensed gives real estate agents the opportunity to connect with a client base with unlimited potential. Whether it is a buyer’s, seller’s, or renter’s market, there is always a way to make money and gain valuable leads for a growing business.