Rentals: The $30 Billion Missed Opportunity

A significant number of agents tend to undervalue the rental market with many considering commissions insufficient for the effort involved. Furthermore, many consider their lack of necessary knowledge of the rental market as a barrier to entry. In essence, a substantial portion of real estate agents perceive rentals as having a low return on investment (ROI).

However, the potential of rentals to boost agent profitability is considerable, especially during current challenging times in the for-sale market. Here are some strategies agents can adopt to navigate the economic landscape:

1. First and foremost, embrace technology: Leverage technology that can simplify the rental process for agents:

• Display properties to potential tenants via the MLS and streamline online application processes.
• Manage tenant screening fees effortlessly.
• Provide relevant documents to landlords almost instantaneously.
• Ensure tenants are updated about landlord decisions swiftly, thereby reducing the usual application timeline.
• Amplify their ROI and hourly earnings remarkably.

2. Harness the Right Tools: Agents can enhance their earnings by collaborating with tenants, landlords, and property management firms, provided they have the right resources and insights. They could focus on buyers and sellers during peak times and pivot to rentals during lulls, showcasing the versatility of the rental market.

3. Explore Business Expansion Opportunities: Agents might overlook the fact that their existing business setup is primed for rental ventures. If they already cater to real estate investors for buying and selling, they can also extend services to ensure properties are tenant-ready. This strategy can significantly diversify their income sources and solidify their reputation as a comprehensive real estate solution.

While home ownership continues to be a traditional value in America, there is an increasing number of people postponing buying a house not just due to affordability reasons but also because of a change in values. Studies have shown that the average age of first-time homebuyers is now 36 years of age. Combine that with the fact that a rising interest rate environment continues to make homeownership ever elusive, ignoring rentals means real estate agents are leaving money on the table. Estimated average rental commission potential in the U.S. totals $30 billion annually when taking the total number of rentals, average rents and commissions into consideration. Utilizing technology that simplifies the rental process will be a smart business decision for any agent and broker.

Click here to learn more about our easy-to-use rental software that provides powerful tools for every step of the process, from tenant screening to rent payment.

For a deeper dive into RentSpree's findings on the rental market opportunity, take a look at "The Untapped Money Potential of the Rental Market."