How to Convert a Renter into a Buyer
Now more than ever, people are hoping to leave the rental market and jump into homeownership. This is particularly true of the Millennials, who are poised to become the largest home-buying class since the Baby Boomers began to drive the market trends years ago.
Still, this group of potential clients has their own unique issues to deal with. They can still have a lot of fear about taking the plunge into homeownership.
How can you convert a renter into a buyer? Discover how to market to apartment renters and a few great tips to help bring these potential clients into your fold.
Connect with Short Term Renters
When it comes to renters, potential clients can be described as either short-term or long-term buyers. It should go without saying that renters who fall into the short-term category are highly motivated to find new housing.
Take advantage of this energy to help them find the right fit, but do remember that sometimes this means helping them secure another rental contract if the market doesn’t look just right for buying.
Don’t take this as a sign that you have failed. Instead, realize that you have just established an important relationship with a client who absolutely will follow up with you in the future once this rental contract is up. Make a note about when that will be and work backward to determine the best time to contact them in the future.
The renters in the long-term category take more outreach over time. They may not be ready to buy just yet but are interested in becoming a homeowner at some point in the future. Those who have very young children, for example, or are just starting to build a family and may want to move in the future to a better school district. In other instances, they could be empty-nesters in a few years and want to downsize.
Ultimately, ongoing outreach is not a difficult thing to establish. Put these clients on an informational outreach list and invite them to current showings, knowing full well they are not in a position to buy yet. This will help educate them about the process of becoming a homeowner and they will act on this knowledge when they are ready.
Educate Your Prospective Home Buyer
Speaking of education, you have a vital role to play to convert a renter. There are many reasons why renters continue to rent, and one of those reasons is fear of the home buying process. After all, when something goes wrong with the apartment or rented home, just call the landlord!
You can facilitate the education of your future clients by showing homes to which they are invited, even if they are in no position to buy at the moment. Explain to them they are under no obligation to do anything except walk around and learn to become comfortable with the process. Consider holding workshops for renters who are interested in homeownership.
Partner with a colleague in banking who can help them understand the financial processes they will need to go through to qualify. Don’t have a friend in banking? Get one. Start networking.
Do not just educate your clients, but educate yourself as well. Step back and take a deep dive into the world of your renters to find their motivations. Learn to people-read so you can determine whether a renter is a short-term or long-term buyer.
Figure out why people are moving around in the rental markets right now. Examine questions such as:
• Is there an increase in employment opportunities in a particular area?
• What are the types of employment in this area?
• Are there a lot of people moving into the area who want to rent first before they buy?
• How stable is this area?
• How many of these clients have owned homes before?
This will determine their comfort levels with the buying process. Will buying a home solve a problem that is typically hard to fulfill through renting (pets!)?
Follow Through & Keep in Touch
None of the education and outreach matters if you don’t follow through on what you have established. Regular contact with your rental market folks will help you keep a finger on the pulse of their concerns.
Set aside time to provide individual attention to these buyers and answer their questions and fears about buying a home. You will need to think about the communication plan that works best for your time and energy, but communicating a simple “Happy Birthday” can establish an ongoing relationship.
Even if this renter never converts to a buyer, the work you put in on outreach can lead to a referral to another client that is eager to jump in!
Converting a Renter into a Buyer is a Worthwhile Journey.
Remember, all renters are potential buyers. Very few people want to rent for the entirety of their adult lives. It really is just a matter of figuring out the timing and connecting with these potential clients on a very personal level.
By using this formula, you can expect to convert as much as a third of your rental leads into first-time home buyers! For more on getting great leads and meeting other agents in your area, join the Homes & Land network of Agents to stay informed and connected with ease.