Editor’s Note: The Buyer-Agent Playbook is a new iteration of RISMedia’s biweekly Playbook segment, specifically centering on buyer agency and how agents are navigating the changes and trends in a post-NAR-settlement environment. The series will provide brokers and agents with insights and information to ensure they not only survive but thrive in these challenging times. Industry professionals explain the strategies they’re employing and unique ideas they’ve formulated. Tune in every Thursday for another addition to the series.
Rental work has largely been a less popular segment of the real estate industry. In most regions, it is not as big of an earner as buying or selling, and can even require more work. Despite this, it has held a large segment of the market since the pandemic.
In the past few years, home prices and mortgage rates have soared, and remain elevated even now. Mortgage rates have jumped back up above 7%, and the latest Case-Shiller Home Price data reported that “U.S. home prices are at or near all-time highs.”
Because of these market challenges and others (namely inflation), renting has been the preferred method of housing for quite a while now—at least for some. Even though rent prices have also increased exponentially since the pandemic, renting remains cheaper than homeownership across the country. LendingTree even recently reported that across the U.S., median housing costs for renters are $563 less on average than for homeowners as of 2022. Recent ATTOM data showed similar results, stating that the average three-bedroom rent is more affordable than owning a comparably sized median-priced home in 210 (95%) of 222 analyzed counties.
Based on this, with the post-NAR-settlement rule changes leaving a lot up in the air when it comes to being a buyer’s agent and earning a living, turning to rental work to supplement your income might be the best option to stay in the real estate game.
Jaclyn Bild—a REALTOR® and broker associate with Douglas Elliman in Miami—has always kept rental work on her resume for a specific reason: lead generation.
“Rentals have always been the backbone of my business since I started, because a lot of rentals lead to buyers and sellers and referrals. It’s kind of like the building blocks, and I don’t mind doing the work,” she explains. “At least here in Miami, the rental market has gone up so much that working on a rental is more lucrative than it used to be in the past.”
While it’s not a big payoff, Bild notes that rental work is an easier transaction overall and connects you to a larger network of referrals.
“If you do a really great job for that person, then they’ll think about you in the future. Many times if someone asks them if they have a REALTOR® they recommend, they’ll think of you, even if it’s not for renting purposes,” she says. “It’s a way to grow your sphere and your network in a faster way than working with just a few buyers and sellers. If you work with a ton of renters in a year, it just grows your book of business naturally over time.”
Bild also mentioned that many renters she has worked with have turned into buyers—and sometimes even later into sellers—growing her client base by connecting her with future leads.
While she’s from an urban area herself, Bild says that rental work isn’t any less lucrative when you move out of urban areas into suburbs and beyond. She explains that you can still see the business benefits no matter where you’re based.
“In my experience in South Florida, suburban Miami is still high-net worth individuals and high rental prices,” she says. “If you look at a suburb of Coral Gables, it’s a very affluent neighborhood. It’s not the core center city where all the high rises are, but sometimes the rental values are even higher. I think those are actually more attractive and worth doing, because those are the people that are probably going to want to buy the house or sell a house in the future.”
As for how to break into the rental market, Bild says it’s not that much different than just breaking into the buying and selling side of real estate.
“It’s like anything else—how do you find business,” she explains. “Whether it be—you have kids that go to school and trying to see who else is moving to that school zone and finding a way you can work with them. Or if you know of anyone that works at a company that is relocating their headquarters to your area, how can you help those employees that are all relocating find a landing zone? Anything that you can think of that is bringing people to your area. If not, it’s just reaching out to your sphere of clients, letting them know you do rentals now.”
Wrapping it up, Bild’s biggest piece of advice is that it takes a while to build your rental business.
“If you’re new in the industry, or you’re entering the renter category, I think the biggest piece of advice is that it takes time. These things don’t happen overnight,” she says. “I always tell everyone, you need a good, solid two years to start to build a base to really see that turnaround. You have to give it time, and you have to hustle.”
Bild concludes, “Especially working with rentals, I know it’s a lot of work and sometimes for very little money. But if you keep working on it, it’s really easy for a rental to refer to another renter, buyer or seller. Everybody knows somebody else that’s moving. It’s a really easy, fast way to build and grow your business. If you do it and you stick it out, they will come back much faster. Those people will refer you. They already like you and trust you.”
