Come on in. The water is fine. After all, it is summertime — always a good time for home sales.
And this summer you might find the water is particularly inviting. That’s because you have more people to approach – specifically renters.
Sure, renters have always been a juicy target for Realtors. But now they’re a bigger target. Get this: Fifty-two of the 100 largest U.S. cities have more renters than owners. Why? One reason is that the foreclosure crisis turned millions of owners into renters. Another reason: demographic shifts — millennials moving out of their parents’ basements and a rising Hispanic population.
And there’s something else brewing that’s making the water even better: new home sales rose 5.8% monthly and 15.6% annually during the spring, and experts say that may cause builders to add new homes. That means better prices for those renters.
In the meantime, analysts predict consumers – including renters – are also likely to take advantage of mortgage rates as they remain low.
So how can you capitalize on renters and turn them into buyers? Here are a few tips:
1. Create “rent versus buy” events – Yes, you’ve heard about rent vs. buy over and over. But now there’s news on this front: A new Rent.com survey says 51 percent of millennials are spending more than 40 percent of their annual income on rent. And 24 percent of millennials are willing to dish out an additional $400 a month just to continue in a rental. Run the numbers and that’s roughly $85,000 more home they can afford. You must become an educator in this scenario – add this information to your website, your emails, ads, etc. And use real-life examples and testimonials from past renters you’ve helped move into a home. But to get in front of renters, consider events: happy hours, seminars, classes, etc. The days of mailers are long gone and simply getting lost with all the marketing noise out there. Live, face-to-face conversations can help you close the deal.
2. Update your marketing materials and listings with a splash of visuals and video – Let’s face it, the print marketing materials simply don’t work like they used to. Today’s renters are younger and find their information online like practically everyone else. We now know marketing efforts need to be digital and include top-notch photography and video – and not just your marketing messages, but all of your listings, too. To get renters off the fence, they need to be persuaded by what their ownership options are. Make them pop off the screen!
3. Get smarter about mortgages – What it all comes down to is affordability – can a renter truly afford to buy a home. That means mortgages. That also means you need to be on top of changes in the mortgage industry. Take time to learn the newest programs and partner up with a good mortgage professional. Private mortgage insurance is another way to help renters who can handle larger monthly payments, but who don’t have enough of a down payment.
4. Consider adding property management to your portfolio – Managing property is an obvious way to have access to a steady and fresh crop of potential buyers. As a property manager, you track lease dates and can hit up renters 90 days before their leases are up with emails reminding them their leases are expiring and explain the benefits of buying versus continuing to rent.
So, you still in for the swim? You willing to put in the extra effort to attract and convert renters to buyers?
Bubba Mills is the CEO of Corcoran Consulting and Coaching Inc. (www.corcorancoaching.com/programs, 800-957-8353), an international Real Estate, Mortgage, and Small Business coaching company. Mills is a nationally recognized speaker, coach and mentor to the top real estate agents and mortgage companies. Visit us at www.CorcoranCoaching.com.