15: [TOOLBOX] Is Working With Renters Worth A Real Estate Agent’s Time?

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If you sell homes, should you also work with renters?  And, by the same token, should you work with sellers and buyers that are in a price range well below your normal home sale price?

renters worth your time?

These are tough questions because, as a real estate agent, you have to spend your time wisely.  It’s easy to get sucked into doing lots of different things that make you little to no money.  So, if your normal home sale commission is, for example, $5000, is it a wise move to work with renters where your commission is maybe 10% of that?

There are two schools of thought regarding how to approach this:

  1. Work with everyone: you never know who might end up being a long-time client with bigger deals you can be a part of down the road
  2. Work only with your perfect client and no one else

Personally, I’ve put together a fair amount of rental deals and I’m calling it quits.  I’ve worked on enough of these to get a pretty solid understanding of the average outcome and I’ve decided to now only work with those in my target market.

Here’s why.

In my local market, the average home sale price is roughly $400,000.  That’s somewhere in the $10,000 to $12,000 commission range per deal.  The average rental deal nets me about $700.

Hmmmmm….do I want $10,000 or $700?

Now, if rentals actually took me only 7% of the time that purchases did, then maybe this would be a fair deal.  But, they don’t.  Renters still want to see 3 or 4 or 5 or 6 or more places, just like buyers.  So, although they don’t typically take as long as a buyer may take in transacting a deal, there’s still a significant amount of time wrapped up in all the things that are required to get a rental to actually come together.

For those of you that do take on renters, I’m guessing that you’re now thinking…

  • but renters could be deals down the road
  • renters could turn into buyers right now if (fill in the variable here)
  • you should help anyone and everyone all the time
  • why turn down a potential client who could refer other people to you

All these are valid points, but…

…the bottom line is that if you don’t run your real estate business, your real estate business will run you.

renter textAt this point in my business, I’m not drowning in more awesome leads than I know what to do with.  However, I am busy every day and I definitely don’t make all the “follow up” and “stay in touch” calls that I should because I am working on active deals.

So, my point is that, if I don’t have time to make the “perfect” day every day by making all the calls I should to people who can result in relationships that are worth $10,000 within the next few months, why do I have the time to work with renters who might possibly be worth a fraction of that within the same time frame.

In the same 8 hours I might spend on a rental deal, I could have had great conversations with large number of prospects and past clients that are worth more both now as well as in the long run.

Sure, it’s possible that I might lose out on a rental deal that turns in to a buyer next year when their lease is up.

But, it’s also definitely possible that the 4 leads I got from an open house last weekend at a $700,000 home are going to buy something really soon.

I’ll take my chances with the buyers.

What’s your take?  Do you work with renters?  Do you work with buyers/sellers below a certain price point that doesn’t make financial sense to  you?  Leave a comment and let us know.

8: A Managing Broker’s View On Succeeding In Real Estate – Kyle Rank

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Summary

Kyle Rank Real estateKyle Rank is a managing broker over about 75 agents.  Learn what he thinks regarding utilizing technology in real estate, where he sees other agents succeed and have troubles, and what it takes to make it in the world of real estate today.

Profile

Manager:  Kyle Rank  

Market: Hudson Valley, New York

Steal His Ideas:

  • A successful agent is summed up as:  hard working, dedicated, committed
  • The biggest opportunity for real estate agents is in following up more efficiently
  • Operate like you own a business
  • If you need help starting with technology, remember to keep it simple and not be overwhelmed
  • Love all your little successes

Strategies

As a manager, Kyle sees successful agents as well as agents that are having some troubles.  The most successful ones see what they do as a business.  They have a plan and stick to it.

They work every single day to grow their business.  No matter what they do or how they do it, they are generating leads every day.

Successful agents are also awesome at following up.  They keep in touch with friends, family, prospects, and others continually.

Kyle loves technology and feels that implementing it in the right way can be hugely beneficial to agents.  For those that aren’t super technical, he suggests simplifying and not getting overwhelmed with a ton of new tools all at once.  Find a tool that you think can help you, try it out, and then try more tools as you get more comfortable in mastering those that you’ve already implemented.

Consumers are researching agents more and more and “social media” is important because it gives consumers a way to “get to know you” and see if you might be a fit for them.

A more specific use of social media is Facebook and keeping in touch with a lot of people at once.  For example, Kyle isn’t even an agent anymore and he still gets a handful of very serious leads every year just from his network of 1000 people who connect with him there.  He suggests posting a combination of personal and work items.

In his office, he’s seen a lot of success recently with agents partnering together.  A few agents have partnered together and others have hired outside help.  By them working together, he’s seen everyone grow bigger and faster.

For newer agents in his office, their training is more than just a mentorship with one agent.  Instead, a group of agents all volunteer to show a new agent what they do and how they do it.  This way, the newer person has a better chance to connect with at least one experienced agent who they match best with.

Never quit.  As a new agent, you should expect that it’s going to take 4-6 months to get some success.  Don’t slow down after just 60 or 90 days.  Keep at it and your career will work out.

Lightning Round

rank kyle coverWhat’s the worst marketing you’ve done that others should avoid:  Print advertising (newspapers, magazines, etc)

What keeps you motivated:  All the little successes you can have in real estate.  You have to love this to be successful at it.

You’ve got 30 days and $1000, what do you do:  Create your sphere and keep in contact with them.  Don’t forget the fundamentals of generating leads and following up.  Next step, research an active geographic area where people buy and sell and start a farm, such as using direct mail.

How You Can Do What He’s  Done

Kyle started out doing the fundamentals of FSBOs and expireds.  After showing success as an agent, he made his way to being a managing broker with his ability to manage, sell, train, and keep pace with technology.

Work hard, dedicate yourself to learning, and commit to serving your clients.

Resources

Kyle’s Website

Open Home Pro App

Smart Zip