Rentals can be a ‘perfect hedge’ during a slow market 

As low inventory and affordability challenges continue to weigh on the housing market, more real estate agents are turning to rentals, says RentSpree CEO Michael Lucarelli.

The company, which was founded in 2016 and provides a platform to help with services from tenant screening to rent payment, has also caught the interest of real estate organizations. This week, RentSpree announced their latest MLS partnership with the addition of New York-based OneKey MLS, whose more than 50,000 members will now have access to its rental services.

Agents are finding that helping a client fill their newly purchased rental property with tenants not only maintains their relationship with the buyer, but also creates a lead generation opportunity from the renters, Lucarelli said.

"When there are less properties for sale, agents tend to be opportunistic," Lucarelli said in an interview, adding that working in rentals — which have remained steady — is a "perfect hedge" against the ups and downs of the for-sale market.

That was also a factor in OneKey's decision to partner with the rental company.

"Our partnership with RentSpree fits our organization's vision to go beyond what is expected to provide our subscribers with access to the tools they need to compete and stay relevant in a rapidly changing business landscape," said OneKey MLS CEO Richard Haggerty.

Working with rentals has already become a popular side job for many agents. The most recent NAR member profile found that residential property management and relocation were the most common secondary specialty areas for real estate agents.

With affordability remaining an issue in the for-sale market, real estate agents can take advantage of rental opportunities — either by assisting buyer clients who need support with their rentals or by becoming landlords themselves.

"You're not going to snap your fingers and say in 12 months everyone can afford to buy a home again," Lucarelli said, noting that helping clients with their rentals can provide an additional income stream in the meantime.

While new construction is providing some additional rental inventory, Lucarelli expects rent increases to continue, but at a slower pace than seen recently. Demand for rentals will persist as long as purchasing a home remains unaffordable for so many, Lucarelli said, noting that the age of a first-time homebuyer continues to creep up.

He also observed that many trends seen in the for-sale market carry over to the rental market as well. Remote work has allowed renters, not just buyers, to move to more affordable or more desirable areas. And just as Florida has been a hot spot for relocating buyers, renters have also flocked to the Sunshine State, said Lucarelli.