A new Joint Center for Housing Study from Harvard University calculated 12 million American’s spend more than 50% of their earnings on rent.
This reality is probably why more renters are waking up fed up that their rent checks are lining their landlord’s pocket and are ready to considering buying.
In the past, Americans in the nation’s most expensive cities have chosen to rent because it appeared to be a feasible solution. 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 realizing that perhaps a fixed-rate mortgage payment is far better than the wildly accelerating rental rates of late.
Yet, some people still choose to rent. Why?
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.
Here are some suggestions on 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 overall long-term cost advantage of buying over renting.
It’s the assumption that the 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.
In addition, educate renters on the down payment assistance programs that are available to them.
Although many 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 rental 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.”
What demographic of renters you should target?
When creating your rental prospect list, target renters who earn in excess of $70,000 per year. 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).
If you’re in a market that doesn’t provide an adequate targeted prospect list when you target $70k and up, then grab an annual salary range that better fits your market.
ProspectsPLUS! has a demographic search tool that makes it easy to build a list of high-income renters based on any annual income range you choose, under the “custom search” option.
Use your Renter Prospects List to become a market maker
Once you’ve created your list, in addition to launching a targeted campaign, turn your list into a “market maker” by doing the following:
- Map your new Renter Prospect List from your “mailing list management” page on ProspectsPLUS!, print it out, and add it to your listing presentations.
- Show your prospective clients on the map how many potential buyers you’ve been in communication with right around the area where their home is located.
- State that it’s a high likelihood that their buyer is among this list of renters.
- Go on to explain how you’re going to be immediately sending out to this list, an invite to a virtual open house of their home.
- This is what you call a double-ended deal and there’s nothing like the feeling of getting both the listing and the buyer for the listing.
One more bonus tip: Be sure to add your new Renter Prospect List to all of your mailings of your Just Listed and Just Sold postcards.
Send a postcard from the new Renter 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
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4. Become a Listing Legend Free eBook
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5. The Free Online ROI Calculator
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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