I remember when I was a brand-spanking new agent back in 1996, I contacted my previous human resources manager and offered to show relocating employees around Denver if they were looking for a rental. I figured, what the heck? After all, they're renters today; but maybe buyers tomorrow and besides, I could use the practice getting around town.
Good for me.
Just the other day, I talked with a new agent who is considering adding property management to his menu of services. I asked him why and he replied that he thought it would be a good opportunity to make contacts with people who will probably buy a home eventually.
Good for him.
But... here's where I'd like to see that reasoning tweaked just a little.
Yes, renters may eventually become buyers, and later, sellers. But... not because they're renters. They may eventually buy or sell a home because they're human beings.
This is another example of the laser-focused prospecting I cautioned against last week. Agents try to identify specific groups of people to target with their marketing and focus their efforts on that group. Other popular targets include first-time buyers, home-builders, divorcing couples and newlyweds. Some agents watch the obituaries in hopes of scoring a good listing or two.
And there's nothing wrong with identifying a group or groups of people you want to work with and customizing your approach to them! But you know what's cool about our business? Almost EVERYONE who crosses your path "may eventually buy or sell a home" -- whether they're renters, builders, first-timers or newlyweds. Just make it your goal to cross paths with as many warm bodies as possible as you go about your day! And remember to smile...
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Tips & Inspirations to Generate Business from the Very Important People Who Know You
Good sound advice.. .anyone is a possible prospect. . .meet people, and meet more people.
That should be your source.
Jennifer.\, This is soooo true. They DO turn into buyers. I even get referals from them for other renters AND buyers.
Hi Jennifer~ Renters can be an amazing lead source! But one has to have some wonderful follow-up practices in place to keep their minds on YOU!
Be careful of conflicts for property management CLIENTS v would-be customer TENANT. Property management is a specialty service and most states require that the licensee actually have knowledge and expertise in the field before getting paid for that service.
Targeting multi-unit apartment residents would be a BETTER use of his time and marketing skills * it is easier for them to get out of current leases with onsite management on site to re-lease apts.
I participated in 25 sides in rental transactions in 2009. I already have one of those under contract for a new home purchase in 2010. I'm always surprised when I hear agents say "I don't do rentals" especially when they have little business. I still had 38 sale side transaction in 2009 so I could have easily bypassed the rentals.
Property Management is a whole different animal. There are agents whose companies just excel in Property Management.
Yes, I have served renters who eventually bought/ sold from me but I select them based on a remote tiny geographical area.
I used to have that mentality but I don't anymore.
I want warm bodies with money and who are credit-worthy!!! LOL!!! Out and about today...thanks to you! Stay soulful!
Jennifer,
Before I began working for a real estate company, the only Realtor I knew was the one that helped my husband and I find a home to rent when we relocated. I liked her, she proved herself, and of course would use her and recommend her to others that are looking to rent and buy. We have one client that has created an entire business around working the rental referrals that our buyer agents don't want to handle. My guess is that she will amass quite a following and when the market turns around she will be the "go to" agent.
Even the most unlikely prospect may lead to a sale--an elderly woman stopped by my high-end Palos Verdes open house. I politely showed her the property and discovered her daughter, a doctor, is moving to the area.
Jennifer, when I first moved to Maryland and got my license I took a lot of renters and rental listings to build my sphere of influence. I didn't know anyone, so couldn't draw on my SOI for business. Renters do eventually buy, landlords need tenant placement and landlords buy more than one house often!! Thanks.
In 2009 I did a lease purchase. Never did one before as this market does not have a lot of them. Now I am doing rentals with an eye on getting these folks into a home. You post made me smile. If we do not adapt we do not survive
Good advise Jennifer, I've always said that one needs to prospect 24 hours a day , you ever know who you will meet and where.
Bill
We all have groups we want to target. The choice is ours. But counting on too small a niche can also be deadly.
Jennifer - we went into property management as an additional revenue stream and also thinking that some of the renters would become buyers. While some of them will buy eventually, there are a lot of renters who rent because they are unable to buy and that may or may not change. We also found that unless property management is a primary focus, it can be an energy drain. For us, it wasn't worth it. We still have a few of our own rentals but no longer manage other people's and appreciate the extra time and energy we have to use other forms of prospecting.
I know more than a few agents whose income in 2009 was largely based on rentals. No, it's not huge money, but it's something. Not to mention a very likely buyer down the road.
So true, when it comes right down to brass tacks, it is a people business and you need to be in front of people in order to generate business!
I have seen more agents working with renters in this market than ever before. they see it as a weekly pay check between closings. I also see it as a way to spin some of them immediatly into home ownership. There are still some great ways to get someone into a home with little to no money down and many potential renters might be able to buy now.
Personally, I think doing leases is a pain in the butt- the paperwork is hellacious, and it is very time consuming for the amount of commission earned. I don't focus on rentals, but if they come my way, i work them for exactly this reason. I just sold a condo to a woman I put in a rental three years ago, and got a referral for a listing from someone else I had put in a lease. (Unfortunately, the listing referral was already listed with someone else, so no go there!) But you are right, it is one more contact, and who knows where it may lead.
The more people who know and trust you, the better. A renter may become an owner, but a renter also knows people who have real estate needs. . .Impress the hell out of them and earn not only their potential business but that of their friends and family as well.
Thanks for all the comments! Yesterday was moving day for me, so I just enjoyed your thoughts as I unpacked boxes, but my brain was too mushy to respond.
I wouldn't dream of doing property management for others, although do my own without angst. My point really was to encourage a mindset shift from targeting specific groups who seem likely to buy someday, to realizing that the entire world is your potential database of people who might buy someday!
Jennifer, I used to do leasing in Texas and turned some of the tenants into buyers. I even had a 10k builders bonus on one home. But you are correct that almost everyone will be a buyer or knows someone looking to buy or sell. I build my business now primarily by referral and it's great to build relationships with people. And it's fun! Great blog!
Good advice. Even if these particular clients never buy - they know lots of people they can refer to you.
I did 12 rentals in 2008 at about $100 a pop, a lot of work for the money. But, I did set many of them up with credit repair companies and others who just wanted to rent until they figured the city out are in my database with 33 touches lined up in 2010. I suspect I will have close to 12 sales from my rentals this year and that to me is a great start.
Cindy in INdy
Right on the money! Everyone we cross path is a potential. Few years back I had a business trip to a call center up north. The name of the company still stuck in my head after 8 years. The name is APAC. It stands for "All People Are Customers". How true is that?