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walter@waltersanford.com

Dear Walter, It was a pleasure meeting you during your recent event in Laguna Hills, CA. I appreciate the material your covered during the event and wanted to thank you for your generosity on gifting me the "Beating the Competition" sales system. Jose U. Jaramillo, Keller Williams

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“I’ll Just Rent It” October 8th, 2009 | Posted in General Real Estate

I have had many agents ask me what thirty years of hearing the same objection over and over again will allow you to do.  My answer is below, but I do have one caveat…you really need to help these people to not make a mistake when they consider renting high priced residential property that was never intended for the rental market.  Here is a recent objection that a coaching client needed help with.

Question:  I have a new objection.  “Our house is no longer for sale because we’ve leased it out for a year.”  How do I come back for that?

 

Answer:

My response to them would be: “I understand.  Have you signed the lease yet?”

 

Their response: “No.”

 

My response: “Well, many owners have appreciated my rental analysis prior to to leasing.  Because of negative cash flow, vacancy factor, maintenance factor, and other expenses, many owners find this to be a losing situation.  This situation compounded with lost opportunity cost and the possible further erosion of equity can be a real eye opener.  May I ask you some questions to get the information so I can work the analysis for you?”

 

Here is the analysis.  Take the rent being paid and subtract 35% for all the expenses of the property except for P and I.  Then subtract P and I from the total.  $3,000 rent less $1,050.00 less a P and I payment of $4,000.00 is a gross negative of $2050. per month.  That is a loss of $24,600 per year. 

Let’s say the “one-time seller” had $200,000 equity.  If he could get a 4% return, that is a loss of another $8,000 in lost opportunity costs in a year.  Plus if this $600,000 home lost another 10% in total value in the next 12 months which is the prediction….that is another $60,000 off the equity for a total loss of $92,600 or almost half your equity…and that is only in one year.  This little dip may last 2=5 more years and not look like a V recovery.  It may skip at the bottom for more than 7 years.

Right now we have buyers who are buying.  Why?  Because we loan them our commissions toward their down payment and can take a note against their new property. We market harder.  We keep a great database of buyers.  We have the best SEO strategy.  We use a team approach, and we educate the agents known to have an interest in your area and price range.  We research their names based on their production for the last 3 years and make sure your property is on the top of their showing list.

I would be happy to show you this in writing and also a plan to accomplish your goal (main core value goal).

You now have a script that works when the deadly “I’ll just rent it” objection comes up.

3 Responses to ““I’ll Just Rent It””

  1. Chris Owens says:

    You da Man ! Amazing how logic beats emotion and frustration…clears the Fog so to speak. Opens the Seller to the realitys

    Thanks !

  2. Wanda Johnson says:

    Thanks for this “I’ll just rent it” blog, Walter. I am a broker and my husband and I are considering doing just that – renting our house. I thought it was a great idea until I read your blog. Our home is on 18 beautiful woooded acres with two pastures only 6 miles from town. Great horse property. We have had it on and off the market for seven years due to different circumstances every time. No offers. We are upside down now due to the market and my husband just had brain surgery. Geez! We need to sell! Got any suggestions? Thanks, Wanda

  3. Joey Condon says:

    Great Information

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