Dec 30 , 2016
Farming is a great way to build your real estate empire. It’s a way to ensure future business and build awareness for your brand. But this is only if it’s done right. Make one of these farming mistakes and you might as well be flushing you money down the toilet.
Not sure what real estate farming is or why you need to do it? Check out our article: Farm to Survive: An Intro to Real Estate Farming.
Farming Mistake #1: Too Large of a Real Estate Farm Area
This is one of the biggest farming mistakes of marketers new to real estate farming. It’s great if you can afford a large farm area, but don’t make the mistake of forgetting how much repetition you need. Remember it takes 7-9 times just to get your name, face logo or brand recognized, let alone have them want to do a deal with you.
Do not make the mistake of underestimating how much attention your farm area will need to make it worth while. Before you quit farming all together, make your farm area smaller. Don’t choose a new one, just weed out those least likely to do a deal with you.
Farming Mistake #2: Picking the Wrong Farm Area
There’s not necessarily a wrong farm area, but there are definitely some that are better than others. According to the National Association of Realtors, the average home buyer in the US moves every 5-7 years. That’s the average, not the requirement. Think about what that statistic really means. Some take longer than 7 years and other are less than 5. Together they make the national average of 5-7 years.
I don’t know about you, but I would much rather invest in a less than 5 year farm area than a more than 7 year farm area.
When choosing your farm area, do some research and find how often homes are selling. The best way to do this is looking at the turnover ratio. To calculate this, simply divide the number of homes that sold by the total number of homes. The higher that number, the hotter the neighborhood is. A hotter neighborhood means a more productive farm area.
Farming Mistake #3: Not Diversifying Your Strategy
Don’t just rely on one form of marketing. That may work, but there a better way. Hit your farm area with as many forms of marketing as you can afford. You want your potential clients to get mail from you, see you online, and see you on the billboard or bus benches outside their neighborhood. You want to look like you are dominating that area!
This sounds like it can get pricey, and it certainly can. That’s why you need to remember rule #1 and select the correct size farm area.
Farming Mistake #4: Not Planning Your Strategy
To stay committed to your farming strategy, you need to make sure you are effectively planning. Knowing these common farming mistakes is a great start, but you need to plan to not make them.
The biggest factor you need to plan for is how to survive until your first deal arises. Don’t expect it to happen right away when farming. Farming is a waiting game. You’re in survival mode, especially in the last few months that finally lead up to a deal.
Farming Mistake #5: Not Tracking Your Marketing
Just like some farm areas are better than others, some marketing is better than other marketing. Plan how you are going to track the effectiveness of your marketing efforts. When you get a call from a potential client, ask them how they found out about you.
If you’re truly mastering farming, they’re response should be: “how could I not know about you?!”
But chances are they’ll just remember whatever the last piece of marketing is that they saw. Even if there were 8 other pieces before they finally picked up the phone.
Farming Mistake #6: Changing Your Farm Area
Changing your farm area is the equivalent of taking everything you have invested in it and throwing it all away. Sure it may seem like the right thing to do when months have gone by and your marketing efforts have resulted in nothing.
But you might just be one more post card away from finally getting a deal. It’s almost impossible to tell when that deal will actually happen. The only 100% true answer I can give you is: someday.
Farming Mistake #7: Just Giving Up
Maybe you don’t want to change your farm area, but just throw in the towel all together. Don’t do it. This is the worst farming mistake of all. Ride it out until it’s finally worth it. Again it will take time, but your marketing efforts will eventually pay for themselves.
If you stay committed to your farm area, it will pay you back in ways you can’t imagine. It may take some time but stick with it. You never know when it’s going to be your lucky day and your phone rings with the biggest deal of your career.
Want to learn more about farming? Watch the Real Estate Farming episode of State of Real Estate.