When real estate agents are strategizing ways to launch or grow their business, many of them favor an emphasis on buying and selling houses as the fastest way to move forward. In fact, some real estate agents don't work with renters or rental properties at all. However, with the advent of streamlined services, online rental applications, and digital marketing, the number of rental properties an individual agent can represent has gone up, allowing higher volume to supplement the smaller commission offered on rentals, and making rental representation a smart way to build a business.
Whether you are just starting out as a real estate agent or are looking for a way to expand your current service offerings, rentals provide a tremendous number of benefits. In fact, a solid grounding in the rental market can help set you up for decades of success as you create a referral network that’s second-to-none. Check out a few of the ways that a background in rentals can set you up for long-term success and growth.
Learn the Local Market
Whether you are a native of your area or have just moved there and are trying to launch a real estate business, rentals offer a tremendous opportunity to learn the local market. This is especially true in hyper-competitive urban markets and with single-family rentals in sprawling suburban enclaves. You’ll get a boots-on-the-ground view of the local schools and a knowledge of the city that could give Google Maps a run for its money.
One of the biggest selling points for rentals is local amenities, including dining, shopping, and entertainment options. By becoming an expert in the neighborhoods where your rental listings are located, you develop your reputation as a local market guru. That can translate into tremendous professional opportunities and an exceptional local network throughout your career.
Build a Volume Business
When you are totally focused on listings and single-family home buyers you are more limited in the number of clients you can work with at any given time. Marketing a new listing or taking buyers around to a number of different properties is time-consuming, leaving you little time to market your services, follow up on leads, or communicate effectively with clients.
When you focus on rentals, you generally represent a number of units within a particular development or a particular micro-market. Add in tech capabilities like an online rental application and a computer-based onboarding process and you can significantly streamline the process of marketing, approving, and filling your rental properties.
Work With Shorter Timelines
Similarly, a home sale or purchase can take weeks or months to come to fruition. In some circumstances, that long timeline can become frustrating to buyers and sellers, causing them to “take time off,” especially during holidays or major life events. In the worst cases, you could spend weeks or months working with a client only to end up with no commission to show for it.
Rental timelines are significantly shorter due to streamlined processes including online rental applications, background checks, and approvals. That means you can find yourself working with a large number of property managers, landlords, and potential renters every month, most of which will result in a commission. Nurture those contacts month after month and you will soon develop an enviable professional network, a reliable group of long-term repeat clients, and an annual influx of new or renewing renters.
Make Inroads With Investors
One of the best ways to build your real estate empire is through working with investors and developers in your market. When you help them keep their rental properties filled, you provide motivation for them to continue working with you in other aspects of their business. This can include the buying and selling of multiple investment properties every year, year after year.
In addition, if one of your long-term goals is developing your own investment portfolio, working with investors puts you in touch with lenders, contractors, and a variety of other professionals who can be of assistance as you start out as an investor. You may even find a willing mentor whose guidance can shave years off the learning curve when you are starting out.
Build Your Buyer Client Base
Every renter you work with is a potential buyer. For the first year or two, you will probably primarily work with them only in order to help them find their next rental property. During that time, communicate with them consistently about first-time home buying, educate them on their options, and introduce them to a local lender who is willing to help them crunch the numbers. Soon you could find your renter turns into a buyer.
Now, continue to extrapolate into the future. That first time home buyer marries or has children and needs to sell the starter condo and move into a larger family home. Faithful follow up means that you'll be top-of-mind for that and any other real estate transactions down the road. Your goal is to become a real estate agent for life to each of those renters you're working with.
Fear of a smaller commission is no reason to reject rental representation — in fact, it’s short-sighted to do so. You can create the real estate business of your dreams on a firm foundation of market knowledge, professional networking, and lead generation resulting from working with rentals and renters.