Marketing to first-timers? Reach out to renters
NEW YORK – Oct. 21, 2016 – If the number of first-time homebuyers rises in 2017 as predicted, Realtors might want to target apartment complexes when prospecting.
LGI Homes, based in Houston, is drawing potential first-time homebuyers to the homes they build with an aggressive marketing campaign aimed at rental complexes. The builder, which focuses almost entirely on low-price, entry-level homes, is sending out 400,000 targeted fliers each week to apartment complexes and other rental units within a 25-mile radius of its new home developments.
One flier reads: “Tired of paying rent? Own a new home for $799/mo.”
The outreach is paying off: LGI Homes predicts a 24 percent growth in new developments – the fastest rate in the publicly traded U.S. home building industry and triple the weighted average of all public builders, according to Johns Burns Real Estate Consulting.
In the fliers, LGI talks about low-downpayment options available, or even zero downpayment options (buyers may be able to qualify for the U.S. Department of Agriculture’s rural home buyer programs with some of its homes or zero-down loans from the U.S. Department of Veterans Affairs).
“They know what they’re paying on rent, and if that number on the flier is lower, that’s going to open their eyes,” says Rick Palacios Jr., director of research at John Burns Real Estate Consulting.
LGI is closely tracking the number of calls it receives from the fliers and how many result in a meeting and eventually all the way to the closing table.
“We believe that most people in the United States, at some point in their career or some point in their life, are going to go from renting to homeownership,” Eric Lipar, LGI’s chief executive, told The Wall Street Journal. “Most of the time that’s not based on the economic situation of the world … It’s based on their personal lifestyle decision.”
Source: “Texas Builder Aggressively Markets Starter Homes,” The Wall Street Journal (Oct. 18, 2016)
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