5 Ways to Transform Renters into Owners
Perhaps the largest demographic of untapped business lies in the rental market. From major cities and suburbs to rural communities—renters across generations are opting to rent rather than own. The question is: why? For starters, many Americans are undereducated about the inventory and financing options available that might suit their budget and lifestyle. Secondly, many would-be homeowners have difficulty visualizing the potential investment of purchasing property, and how homeownership can build wealth and security in the long-term.
As an agent, you’re always on the lookout for potential clientele. Now, to guide renters toward the real estate market, keep a few of these strategies in mind as you meet and greet this untapped demographic.
- Show renters that purchasing a home isn’t impossible.
Possibly the biggest hurdle for renters is believing homeownership is possible. Beyond saving for a down payment and boosting credit scores, there are dozen more factors to consider: affording utilities, homeowner’s insurance, renovations, property taxes, and more. Besides that, assembling pay stubs, finding an agent, arranging house tours, negotiating a price, and timing the transition are all major considerations to surmount. One way to combat this thinking is to make the process transparent and demystified. Find examples of past clients who made the leap successfully, or profile the average buyer in your marketplace and see how that renter compares. Provide evidence that it’s been done before and can be done again, then build a gameplan from there.
- Help would-be homebuyers create a roadmap to ownership.
It’s no secret that buying a home can feel overwhelming. Compared to signing a year-long lease on an apartment, taking on the house-hunting process is a daunting affair. That’s where your expertise as an agent comes into play. Consider making a checklist, or step-by-step roadmap, that guides clients through the process from start to finish. This way, you’ll manage expectations and create a path to ownership that’s specific, instead of abstract. They won’t have to wonder what goes into buying a home when they can look at an interactive site or read a document and see the steps outlined before them, with you there to guide the way.
- Collaborate with mortgage professionals to find the right financing opportunities.
Many renters aren’t aware of the variety of mortgage financing options out there that cater to first-timers, offer low down payments, or down payment assistance. Most buyers believe that the standard 20% down is a hard and fast rule, when in reality, there’s far more flexibility out there to cater to renters where they are. There are even loan options catering to freelance workers, renovation options, and other unconventional routes to ownership. Work with a mortgage pro and find the route that suits your renter best.
- Compare and contrast rental rates with monthly mortgage payments.
One way to convince renters to make the shift is to demonstrate the savings potential of paying into a monthly mortgage, rather than throwing away rent on a property they don’t own. To do this, draw up the average rental rates in your area, then find some potential listings that would demand a similar amount in monthly mortgage payments. Sometimes placing these numbers and images side-by -ide can prove to renters that what they manage to pay monthly in rent, they can pay monthly in a mortgage—while building a lasting asset.
- Paint the big picture.
For most, renting isn’t the most sustainable financial option when it comes to housing. Rents rise, families grow, and retirement looms. Building a financial future and homeownership go hand-in-hand. When planned appropriately, buying a home can create a path toward retirement and position homeowners in a better place for further investment in the future. A rental has little security or investment returns to offer, while owning a home makes a renter king or queen of the castle.
Prospecting renters as potential homebuyers may seem like a time-intensive way to cultivate new clients, but logic is on your side. Keep these tips in mind as you broach the conversation with renters in your hometown. All it takes is clear-cut value proposition and a listening ear.