For real estate investors, an important expenditure associated with doing business is implementing a marketing strategy. An effective marketing strategy for investors goes beyond real estate advertising cost and extends to brand development and customer engagement. Considering the array of marketing options available and the third parties that may be involved in creating them, marketing can get quite costly for real estate investors.
According to Web Strategies, the average business spends 7.9% of company revenues on marketing. That can be a pretty penny for many solo entrepreneurs or small-business owners. While potentially a costly endeavor, don't immediately believe marketing is not a viable option for you. The actual cost varies by business. Plus, your marketing strategy can be a la carte, determined entirely by you. In this digital age, marketing is a business investment that can reap incredible returns, so it's worth your time to explore your options.
Let's explore some common marketing tools that industry professionals use and then review their cost.
Note: This is not an exhaustive list. This list provides a few popular advertising tools.
Facebook (NASDAQ: FB) ads are a marketing tool that has gained a significant amount of popularity over the last few years. Facebook allows users to create an ad budget and users can spend as little or as much as their budget allows. Ads can be designed and purchased by using the company's Facebook profile or, for more in-depth advertising campaigns, through Facebook’s Ad Manager platform.
Facebook ads are definitely worth the investment: Facebook is currently the biggest social media platform and has approximately 2.6 million monthly active users. With the ability to reach an audience of that size, advertising on Facebook provides a powerful resource to grow a business, build a brand, and have real estate properties viewed by millions of people.
Facebook also has an ad auction, so if a business decides to run an ad on Facebook, make sure it's good! Facebook ads compete against other businesses' ads to determine which will be shown to customers at any given time.
Since Facebook ads will direct users to the investor's Facebook page, this is a great tool for investors to engage with their audience.
Another social media tool that real estate investors can use to market their business is to create a company hashtag.
Hashtags are an important part of all social media platforms. They provide brands more exposure, in turn helping spread the word about the company’s product to a massive audience.
Hashtags provide companies with the ability to connect their brand with popular topics and current events. This drives new viewers to the company’s social media page, and in turn, the company is able to expand its reach. According to Zillow, these are some of the top real estate hashtags:
A great thing about hashtags is they cost nothing!
Real estate content is another powerful digital marketing tool industry leaders can use with proven returns. By drawing customers to a company's website, content is a leading tactic for brand development and lead generation. So, what exactly is content and how is it created?
Content encompasses a variety of marketing tools, including blogs, videos, news stories, photos, and helpful articles. The cost to create content varies, as do the methods of creation. Some investors use freelancers who charge a flat fee or a monthly subscription service; others do it themselves for free. Regardless of which creation avenue you choose, know that content creation is shown to be incredibly effective.
A more traditional approach investors can use is to simply list the investment property. Properties can be listed on industry-specific websites like Zillow (NASDAQ: Z) (NASDAQ: ZG) or Redfin, among others.
To list a property on Zillow, owners pay a flat fee of $9.99 per week or $480 for the year. Depending on the budget and how long the property stays on the market, $9.99 per month may be quite affordable and potentially more affordable than Redfin.
Redfin charges a 1.5% listing fee when you sell, or a 1% listing fee when you buy. This fee could be quite substantial depending upon the price of the sale or purchase.
Targeted text messages
The cost of sending targeted text messages depends on the company you choose to run the message campaign. While the cost varies with third-party management, text messaging, or SMS, is among the lower-cost marketing options and has a solid return on investment.
Tax deduction for advertising expense
When investors incur costs with running marketing campaigns, the good news is this is a tax-deductible expense. So when tax season rolls around, investors will be doubly pleased with the rewards of their marketing tactics.
Millionacres bottom line
Whether investing in residential or commercial real estate, investors must prioritize their marketing strategy. While the cost will vary from business to business, allocating funds towards marketing and advertising can make a marked difference in real estate ventures. In short: To be successful, people have to know you exist. If marketing is a confusing topic, don’t go at it alone, hire a professional so those marketing dollars don't return void.