There’s no doubt about it - selling a home turns a hefty profit, especially with the inflated prices and limited inventory we’ve seen in the last few years. It’s easy to become hyper-focused on selling a home and overlook a quicker and often easier way to make money: rentals.
Since June, higher interest rates and declining inventory have challenged the home sales market. Combined with a historic housing shortage, this is a recipe for a rise in rental transactions. A “rise” is even a bit of an understatement; in certain high-volume markets that are actually seeing bidding wars for rentals. The rental market took off in 2021, and at the end of 2022, it reached record-breaking heights in cost and demand. As a broker, this creates an opportunity to capitalize on a lucrative market.
How rentals are increasing profits
With an intense demand for rentals and a declining demand for over-priced homes, more brokerages understand how they can manipulate this market shift to their advantage. While the commission may not be as large as on a home sale, there is still money to be made from rentals, and with inflated prices and unheard-of demand, that profit can be surprisingly satisfying.
The beauty of rental profits is in the speed at which they are made. Rental deals close much faster than those on home sales, putting money in the pockets of brokers and agents quickly. Payments clear quickly, allowing you to keep pace with both sides of the aisle: tenants get into their rentals quickly, and landlords stay happy with prompt delivery of funds and closure on rental agreements.
DepositLink facilitates rental deals.
Closing on a rental is different than closing on a home sale. There are different dynamics and parties at play with rental properties. More often than not, there are multiple tenants, which equals the collection of multiple deposits. These funds need to be safely transferred to the landlord and brokerage. These functions are facilitated quickly and securely with DepositLink.
Rental deals move quickly. Technology that supports the nuances of rentals and the speed of the market is essential for success. Closing the deal quickly means agents receive commission quickly. Less time chasing payments and worrying about checks bouncing frees up time to get started on the next rental. DepositLink will makes rental businesses more efficient. Learn more about DepositLinks rental functionality.
Give up home sales and focus on rentals?
No - that’s not the moral of the story. The truth is that companies that only do rentals are also struggling to find their clients affordable housing in a market where competition is fierce, and prices are sky-rocketing. Survival in a volatile market means pivoting between both home sales and rentals, being able to work both sides of the industry, and locking down profits in either circumstance.
Book a demo to see how DepositLink can support rental deposits and commissions for your brokerage.