If you’re a real estate investor, you need to run your rentals like a business if you hope to maximize your profit potential. Part of managing your company means making a real estate marketing budget.
Consider this exercise a valuable one — it forces you to examine your approach and make a plan. Here’s how to make a real estate marketing budget in five relatively simple steps.
1. Study Market Trends
If you are considering investing in new properties, where should you look to make the most bang for your buck? If you need to list existing vacancies, what kind of tenants do you hope to attract?
Studying market trends offers valuable insight into your future direction. For example, right now, unemployment remains high, meaning that you could score low buying prices if you hope to invest. If you were thinking of selling, you might want to hold off until the economy improves.
Keep current trends in mind when screening tenants, and be flexible to attract maximum occupancy. Even though financial experts recommend people devote no more than 50% of their income to necessities, the reality of wage stagnation coupled with job loss means many workers now spend that amount or more on rent alone — forget utilities, insurance and food. You could screen out quality tenants if you only focus on their present ability to pay, not past good faith efforts to make rent no matter what crises they endured. Talk to applicants.
2. Weigh Risk and Reward
As with any business, you risk a considerable loss — but in the real estate world, you often have only failure to educate yourself to blame. After all, they aren’t making any more land. Your job isn’t to determine how much supply to produce but how to best use existing property for its highest and best purpose.
That said, some investments are riskier than others. For example, if you deal in commercial properties, you must consider how proposed zoning regulations could impact your development plans. You also need to keep up with city planning — breaking ground on a strip mall right before a major roadway project disrupts consumer traffic can influence future rents.
It helps if you live locally or have the means to visit the location. Some developers run into trouble when conditions that didn’t make the property listing later impact rental prices. If you build a multi-unit complex too close to an agricultural center with thousands of cows, expect residents to gripe about the smell in summer — and possibly move elsewhere.
3. Consider the Average Budget
There’s wisdom to the saying, “Why reinvent the wheel?” Even though your business is unique, you can learn a lot from observing how other people have successfully run their enterprises, starting with their budgets.
You can find sample marketing budgets online — download and examine several to see what suits your vision. The process feels far less intimidating when you have a model to follow and a template to complete.
It’s also beneficial to join networking groups of fellow real estate investors. Many have online forums that cover topics such as how to make a real estate marketing budget.
4. Investigate Free Resources
It seems like everything has a price in today’s society — even the water does, and it’s probably only a matter of time before they start charging for oxygen. However, if you are savvy, you can find free advertising.
Do you have a blogging friend who runs several websites? If they’re in the market for a home, see if you can arrange a service-for-service swap. They link to you in their articles, and you repay them in advice on properties that suit their needs.
If you are on social media, start working it to your advantage. Include social sharing links in listings so that prospective clients can email listings to interested parties and share them on their Facebook and Instagram pages.
5. Evaluate Your Strategy
Finally, you need to evaluate how well your strategy is working and tweak it accordingly. When establishing your various marketing stream, include a way to measure your return on investment so that you can measure which actions provide the most bang for your buck.
Remember, as a landlord, you deal with where people hang their hats. Emotions can run high, and public perception of you and your practices matters as much to your long-term success as a temporary bump in numbers. Use subjective measures such as tenant and client satisfaction surveys along with budget reports.
Learn How to Make a Real Estate Marketing Budget With These Tips
Now that you know how to make a real estate marketing budget, what is your business vision? Begin charting your path to future success with this guide.
Oscar Collins is the managing editor at Modded. He writes about cars, fitness, the outdoors and more. Follow @TModded on Twitter for more articles from the Modded team.
