Category: Hot Tips Tuesday

Profiting From Positive Rental Karma

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Last week I wrote that “Rentals Suck”, as I very delicately put it.  The message was that although rentals don’t add up very well in terms of pay earned for hours expended, rentals can be used as a lead system, and in that regard, they can become a very profitable part of your practice.  If you missed that article, you can read it here.

But the best part of working rentals is what I call “Rental Karma”.  Stick with me folks, this is a fun ride, I promise.

Rental Redemption Reason #2 – Positive Rental Karma

Rentals are good “karma”.  Okay, I don’t want to seem all new age and mystical here.  As far as I know, there isn’t some kind of real estate agent’s cosmic bank account from which you make withdrawals providing you first pay it forward to someone else.   Or is there?

I’ve seen this happen so many times that it seems like the universe actually IS keeping score.  How can that be?

I’ve thought about it, and I think I figured it out:  “People don’t care how much you know, until they know how much you care.”  Let me explain.

When an agent agrees to take on a tenant-client, that agent has done something interesting—she’s put her client’s needs ahead of her own.  Yeah, I know, we do that with every client, fiduciary duty, etc, etc, yada, yada, yada.   True enough.  But there are some clients with whom some agents would rather not choose to work — the burden of fiduciary duty and the hours required to land a rental contract with a tenant-client is probably not going to pencil out well based on most agent’s annual income goals.  So an agent’s efforts with a tenant-client are more about helping the client, and less about helping herself to a lucrative commission.

So back to my previous statement.  It’s a universal truth that “people don’t care how much you know, until they know how much you care.”   But a tenant who knows how much you care still doesn’t pay enough to have much impact on your success.

So what gives?  The answer is, it’s not about the client this time.  It’s all about your own subconscious mind.

“The subconscious mind can’t take a joke”, as Mark Victor Hanson used to say.   That’s why the old adage of “fake it ‘til you make it” works.  We all know that if you re-tune your brain to see yourself as a success, then your brain will fall into the patterns of success.   Same for how we treat our clients.

If you focus on helping your client, your subconscious takes note.   When you know the financial reward just isn’t going to be there (even if you find the perfect rental house), you free yourself from all kinds of baggage.  Your brain gets real clear about your goal.  And your goal on that transaction is not about that $300 rental commission check.  Your one singular goal on that transaction is to make your client happy.   Quite simply, on a rental contract, that’s the only thing that matters.  It certainly couldn’t be about the money because there pretty much isn’t any!
 

So working with a rental client causes a re-tuning of your brain, a re-focusing of your subconscious on making happy clients, rather than on making huge commissions.  Please understand, huge commissions are not bad, and I’m not trying to imply they are.  Rather, I’m trying to point out that huge commissions are a by-product of happy clients.  Start by focusing on creating happy clients…and the huge commissions will take care of themselves.

I believe that when you train your brain to focus on your client’s happiness, you become a better agent.  You can’t help but show that you care about your client.  I believe your client, and even your next client, can pick up on that.  So your next client is able to see “how much you care” and respond exactly as the old adage predicts.

When I have an agent who is in a slump, I often recommend that they work some tenant lease transactions.  It gets them out there wearing their Realtor® hat.  It creates positive activity and positive habits.   But most importantly, it re-tunes their subconscious mind to focus on what matters to the client.  It’s good karma.

Final point – At United we don’t want you to pay big broker fees on teensy rental commissions.  Creating a happy rental client will have a positive effect on your future earnings.  And when that happens you’ll get a real adult-sized commission check, and that’s our mutual goal.  So to encourage you to take on those rental clients and generate some Positive Rental Karma, we take just $49 and cover all of our costs including E&O with that.  You get the rest.

So, do rentals as a crafty lead system, or do rentals for the good karma.  But now matter why you do them, I don’t want you to be frustrated by a punitive split or a high transaction fee.  And that, I believe, is good karma for all of us!

Rentals Suck — Or do they?

Part 1 of a 2 Part Series

Most successful agents will agree, rentals are not much fun.  On a rental transaction you get to do pretty much all of the work, but receive very little of the reward that you would get from a sale contract on the same property.  If you have the Tenants, it’s even worse.  Very likely you’ll drive them to home after home, and expend all the same energy (not to mention gas) that you would for a sale transaction.  And when you are all done, you get a few hundred dollars, often times about enough to cover your gas bill and leave you about fifty cents an hour in “profit”.

It’s true! Rentals suck!  So why do I recommend you do them?  There are two redeeming reasons to take on that next rental client who calls.

Rental Redemption Reason #1 – Today’s renters are tomorrow’s buyers.

Not only are they future buyers, but you probably know the exact month he or she will be in the market to buy.  How many leads do you have where you know they’ll buy something, sometime, but they just aren’t ready right now.  With a renter, that doesn’t happen.  You know EXACTLY when their lease ends, so you know exactly when they need to start shopping in earnest.  Usually you know this before the renters themselves even realize it.  So you can guide the transaction from the start, and keep the process moving along smoothly, assuring your clients (and your commissions) are safely under control.

Given that most busy real estate offices have very few agents who really want to work rentals, you’re likely to find lots tenant rental opportunities just by letting the other agents know that you’ll be happy to work them.  As we’ve already established, most successful agents don’t want the hassle of a tenant client, and most won’t even ask for a referral fee.  In that situation, you should consider renters to be one of your best lead programs.  So work them like leads.  Put them on a carefully planned follow-up system based on their lease ending date.  Ramp up your marketing efforts to them as their lease end nears. 

But keep in mind that unlike most leads which require a monetary investment on your part, these leads pay you for the privilege of being in your database.  Sure, lease commissions are nickels and dimes, but that beats the heck out of shelling out hundreds (or thousands) of dollars for leads that may or may not ever result in commissions.

Imagine—a lead system that pays you, just for signing up!  That’s the right way to view a tenant client!

By the way, just as a side note, at United we provide the lead follow-up system for your tenants.  Our full featured CRM includes several types of prospect follow-up drip campaigns, including a system designed around turning your tenant-clients into buying clients.  Because it’s not enough to be a 100% commission brokerage.  We also want to be the brokerage that helps you with the best tools and best service to help you sell more.

Look for Rental Redemption #2 in next week’s Hot Tips Tuesday email!