Pre-pandemic housing news was enough to give a reader whiplash. While many prognosticators had a vision of a “strong housing market through the end of the year,” others were firmly in the opposing camp. “Housing market will probably slow,” blasted the headline of a popular housing market website.
Nothing much has changed, despite social distancing mandates and the rest of the inconveniences and heartache brought about by the COVID-19 pandemic.
The fact is, the housing market is doing just dandy in certain regions across the country. Utah’s real estate market, for instance, has remained “blistering,” according to a report at KSL.com.
In March, Utah homes sold more than a week quicker than they did in March of 2019. The median sold price in March 2020 was $35,000 more than last year as well, according to the blog at UtahRealEstate.com.
Regardless of whether your market is up, down or stagnant, folks still want to buy homes. Many renters who make in excess of $70,000 are waking up to the fact that their current home is inadequate and that those monthly rent checks they write enrich the landlord’s bottom line, not theirs.
But they don’t understand that they have options.
With an unemployment rate just shy of 15 percent, it’s easy to become pessimistic about the real estate market. After all, requirement number one for getting a mortgage is that you need to prove you can make the monthly payments.
Sadly, it’s those Americans least able to handle unemployment that lost most of the jobs. “Job losses were highest amongst the nation’s lowest-paid workers,” according to Matthew Speakman at Zillow.com.
In April, for instance “62% of April’s loss in employment was felt by workers in industries paying below-average wages,” typically those in the hospitality and leisure industries, Speakman claims.
It’s highly likely that many, if not most of these employees are renters. It’s equally unlikely that they’ll be able to qualify for a mortgage in the near future. This is not your target audience of renters.
Your target should be renters who earn in excess of $70,000, especially the 1.35 million-plus American households who earn $150,000 per year or more and who “became renters between 2007 and 2017.” (US Census data)
That wealthier Americans in the nation’s most expensive cities are choosing to rent should come as no surprise. In San Francisco, for instance, where the median starter home costs about $895,000, there are more high-income renters than homeowners, according to the U.S. Census Bureau.
As rents rise, however, they’re awakening to the fact that perhaps a fixed-rate mortgage payment is far better than the wildly accelerating rental rates of late.
So, why are these people choosing to rent rather than buy a home?
Many are cash poor and don’t understand that they don’t have to have a huge chunk of money for a down payment and closing costs. Others assume they can’t afford to purchase, despite having a decent income.
To successfully pursue this real estate audience requires targeted marketing that dispels myths and speaks to their pain points.
We’ve been seeing an uptick in agents who are purchasing prospect lists targeting renters earning in excess of $70k.
Along with the list, they also typically choose one of our targeted marketing campaigns for Renters/First-Time Home Buyers.
Here are some suggestions on additional topics you may want to use to attract these tenants.
That up-front cost
“I was a long-term renter because I wanted to wait to buy until I could afford to stay in my current neighborhood,” a new homeowner tells Jennifer Bradley Franklin at BankRate.com.
So, why the long-term tenancy?
“I didn’t realize that there were affordable options,” she told Franklin.
One would think that with all the information at our fingertips, real estate consumers would be better informed about down payment assistance, closing cost help and the various low-down loans available.
It’s the assumption that the up-front costs are higher when you buy than when you rent that keeps many of them out of the housing market.
Dispelling this myth is a worthy goal in your marketing efforts.
While most down payment assistance programs are reserved for low-to-moderate-income earners, there are some for those who earn more.
In fact, with more than 2,000 down payment/closing cost assistance programs nationwide, you are bound to find one for your higher-earning, home-buying prospects.
Or, let them know that the FHA-backed mortgage has a down payment that can go as low as 3.5% and there are no income limits for borrowers. You would be shocked to know how few consumers are aware of this.
Buying a home builds wealth, renting doesn’t
Back in 2018, when household net worth in the U.S. hit a record $98.74 trillion, homeowners saw the most gain.
In fact, “The average homeowner has a net worth of $195,400, 36 times that of the average renter’s net worth of $5,400,” according to Patrick Sisson at Curbed.com.
This is something that many would-be homeowners don’t consider when they sign the lease agreement. From that moment until the lease expires, these renters are adding to the landlord’s net worth, at the expense of their own.
Address this in your marketing. Let them know that, as Sisson says, “Homeownership may be one of the most significant, and surefire, means of increasing net worth.”
Send a postcard from the Renter/First Time Buyer Series to a targeted prospect list of renters who earn in excess of $70k.
Need help targeting a specific niche of buyers or sellers? Use our prospect list tools to create the ideal list (it’s easy) or call our support team for assistance at 866.405.3638!
PLUS: When you have time…here are some Free resources we’ve made available to support your success.
1. The Free Real Estate Mailing List Guide
The Real Estate Mailing List Guide outlines the top tools for generating targeted prospecting lists including Baby Boomers, Empty Nesters, Investors, Lifestyle Interests, High-Income Renters, Move-Up Markets, and more. The Guide also defines done-for-you marketing campaigns to match these markets. –Click Here
2. The 12 Month Done-For-You Strategic Marketing Plan
The Real Estate Marketing Planner is a powerful 12-Month-Guide that strategically defines what marketing to do when. Four key market segments are included, Niche Marketing, Get More Listings, Geographic Farming, and Sphere of Influence. –Click Here
3. The Free One-Page Real Estate Business Plan
Treat your business like a business it is vital to long-term success in this industry. Some agents may put together elaborate business plans, yet there’s something powerful about keeping it simple. Check out our one page Online Real Estate Business Plan. – Click Here
4. Become a Listing Legend Free eBook
Ready to take a vertical leap in your real estate career? If you’re looking for inspiration…and the tools and methods to dominate a market and go to the top in real estate…you’ll find them in this free book. – Click Here
5. The Free Online ROI Calculator
Consistency and automation are the keys to success. Discover how effective direct mail marketing can dramatically increase your bottom line. Enter your statistics in our Free online ROI Calculator and click the ‘CALCULATE MY ROI’ button to see your results instantly! –Click Here
6. The Real Estate Marketing Guide “CRUSH IT”
The “Crush It” Guide includes easy steps to launching an effective direct mail marketing campaign, how to create a targeted prospect list, the perfect way to layout marketing materials for success, seven opportunities available to target in your area right now. –Click Here