Farming in real estate is similar to farming in real life. It is the act of planting many seeds in one location and taking care of those seeds until they grow and you reap the crop. In the case of real estate that crop is listings and buyers. You may have heard of farming and understand the concept but don’t quite get how you can do it simply and inexpensively. Most agents think about postcards when they discuss farming and that can be out of the reach of new agents financially. By choosing the right farm area you can incorporate other things into your farming activities to increase your crop and lower your costs.
There are two basic things you need to think about when choosing a farm – location and sales. The location will play into which marketing activities you can do, and you want to make sure the neighborhood has enough home sales for it to be worth your time. If there are only 5 houses that sell each year, unless it is a very high end neighborhood it will probably not make sense unless you know you can get all of the sales. So here are a few things to look for:
If you can walk to each house easily you will be able to incorporate door knocking, inviting neighbors to open houses personally, dropping off pop-bys around the holidays and more. If homes are situated on 3 acre lots it will be much harder for you to add these activities to your marketing plan.
The easiest way to lower your print marketing costs is to mail EDDM. The post office has routes setup and if your neighborhood is essentially all in one or two routes then your postage rate will be much lower. For instance, one of my farms is about 850 homes along two routes. To mail EDDM it costs me $145, whether that is postcards or an 8×11 sheet printed on both sides. If I have to pay actual postage it would be $425 at the new rate about to go into effect! Plus I don’t have to worry about addressing each piece, I just print the EDDM unit on there and they are ready to be dropped off from the printer. Huge time and money savings!
Do People Search for the Community?
By choosing neighborhoods that are well known and searched for you can add online marketing to your farming plan. This is my number one thing when choosing a new area to farm. I can create a website, Facebook group, newsletter, and more specifically for that neighborhood. There are of course established neighborhoods, but don’t forget about new construction communities as well! While you will be competing with the builder at first, you will be the first agent in there, and by the time anyone else decides to farm, you will already have a firm grasp on the market.
Be the Expert
We know we need to be the expert all the time, but when you really know a neighborhood clients and even other agents will flock to you. Many of my farming communities are very unique, often gated and private so agents from outside the area really do not know anything about them. I get calls every week asking about properties from other agents, and often get the referral because they understand that I have the knowledge their client needs. My own leads coming from my websites of course understand this when they see the wealth of information I have written about, and so they trust me with their sale or purchase even though we have not met in person yet. So yes, think about the community you live in, but also think about the odd places that have a lot of unique details about them where you can shine.
Starting a farm with 250-500 houses is an easy to control number, and you can add sections as you go or add completely new areas to farm as you get your marketing into place. Turnover rate suggestions are usually at least 5-10% each year, and take a look to see if one agent has a high percentage of those sales. That will be your competition, so try to see what they are doing and do it better or add other marketing in to stand out. If they are only doing postcards, throwing a block party each year might be worthwhile for you.