The Houston rental market has traditionally been overlooked by Multiple Listing Services (MLSs) and brokers because commission rates are lower. However, a study conducted by the Houston Association of Realtors (HAR) shows that the rental trend is growing, and it is necessary for MLSs and brokers to embrace it to help their subscribers.
The Facts About Houston Rentals
HAR’s study, based on research from a consumer research panel, made up of local Houston residents, says that historically, the real estate industry thought of rentals as a separate process and a separate set of customers from homebuyers. However, this is no longer the case. According to the study, 40 percent of respondents previously owned a home. It also shows that a portion of those who were committed to home ownership moved to rentals because they are more affordable and require less maintenance.
The Houston rental market was generally assumed to be primarily targeted to younger consumers who cannot afford to buy a home. The survey shows that while a majority of renters are younger than residential homebuyers, a significant portion of renters are over 45 years old.
HAR’s survey also reveals that more than half of renters are looking for single family homes. Some are looking to rent until the market improves, and some are considering buying properties in the future.
“These renters might turn into sales clients,” Tom Huckabee, a Realtor at Keller Williams, said. “It is important for Realtors to be out there and promote that revenue stream.”
How to Adapt to the Houston Rental Market
The Wav Group Consulting company recommends strategies for brokers and MLSs to fully adapt to the rental market:
- If you don’t have a rental section on your website, you need to get one, and make sure it is easy to find and search. It’s important to have both rental and sales properties on your site, so consumers have all options available as they’re searching.
- Speaking of options, you want to have a comprehensive database on your website. This means you might have to work with larger leasing companies and developers to get their listings online, in addition to listings submitted by individual agents.
- Start an education program helping members understand the rental/purchase market, and how why should both be treated with importance.
- It might be smart to enforce new rules and policies about compensation, rental practice and education (similar to the rules you have for residential sales).
Renting is still an important part of the real estate market – embracing this will be good for business.
“Traditionally, Realtors have never made good commission on rental properties,” Huckabee said. “But now, if they sell two or three a month, it’s good for bread and butter.”