Residential real estate investment in the United States generates a 10.6% annual return on average, while the ROI for commercial real estate is slightly lower at 9.5%. Yet, since there are around two million active real estate licenses nationwide, competition is tight, and you may find it challenging to grow your real estate business.
Grow Your Real Estate Business
By implementing these three effective growth strategies, you can grow your real estate business to the next level.
1. Stage Your Properties
Viewing a potential home is usually an emotional experience. People typically make their decision based on their feelings – can they imagine how their life may look in that home? And, since almost all buyers start their searches online, staging is, therefore, a must – you need to make the home look lived in. In fact, staged homes sell within just 33 days, while homes that aren’t staged are on the market for an average of 196 days.
So, if you’re finding it challenging to sell an empty property, stage it with furniture (either your own or you can hire a staging company to take care of the details). You can then make a memorable first impression, and potential buyers will have a clear idea of what the home looks like lived in – which ups the odds of making a sale.
Staging a property effectively does take some thought, so take your time planning each room. For example, focus on creating a distinct identity for each room – you want the room’s function and purpose to be immediately obvious to the viewer.
So, for instance, a home office should feature a desk and chair, as well as shelving for books and folders. You can also soften the ambiance with the artwork. With the right furniture arranged well, the potential tenant will be better able to get a sense of just how big the room is – unlike if it was left empty. And, also be sure to make the spaces active and lively, just like a real home.
Make sure there are logs in the fireplace. Rather than leaving the dining table bare, decorate it with plates and a pretty centerpiece like a vase of flowers or a bowl of fresh fruits. In fact, people often bake cookies or bread before hosting a property viewing, and there’s a reason they do that: to make the property feel like home for the viewer. Not only does this infuse the home with a delicious, cozy scent, but it’s also a nice snack for potential tenants.
2. Hire a Property Manager
Although residential real estate can be lucrative, being a landlord involves a myriad of responsibilities, such as finding tenants and everyday maintenance. Pest control is also a key responsibility – as many as 2.9 million households in the U.S. reported seeing roaches or rodents in their homes in the past year.
In the instance, preventative maintenance fails, organizing professional pest control as soon as possible is essential to ensure a clean and safe rental property. By hiring a property manager, you can free yourself from these time-consuming responsibilities and better focus your efforts on growing your business.
Property managers can take care of various tasks depending on your needs. For example, maybe you want your property manager to advertise the rental and source tenants. Or, perhaps, you need someone to collect rent and take care of basic property maintenance and repairs. In fact, a reliable property manager can help lower rates of tenant turnover thanks to the quick and efficient service provided.
When your tenants are happy with the service provided and recognize they’re in good hands, they may be more willing to accept any changes, such as rent increases. A property manager can also help ensure shorter vacant periods; they’ll know how to secure high-quality tenants fast and maximize your revenue and grow your real estate business.
Moreover, you can even work with a property management company to take care of all aspects of your rental property. Although this can be pricey, it’ll pay off in the long run, particularly if you have multiple properties to juggle. Whichever route you decide to go down, always check any property manager you work with is licensed. And once you make your decision, be sure to draw up a comprehensive property management agreement for you both to sign.
This document should clarify the manager’s role and responsibilities, as well as their pay and termination conditions.
3. Embrace Direct Mail Marketing
Direct mail marketing is far from dead – even in today’s digital world. In fact, direct mail boasts a 4.4% response rate, compared to just 0.12% for email, data from the Direct Marketing Association reveals. And, in terms of cost-per-acquisition, direct mail is an impressive $19. That said, the specific direct mail format plays a key role in the response rate.
Oversized envelopes, in particular, are your best choice, with a 5% response rate, while postcards and dimensional mailers offer 4.25% and 4% response rates, respectively. And, since direct mail marketing isn’t so popular among businesses anymore, you have an even greater chance of standing out from the crowd and making a memorable impression on customers right from the start.
Fortunately, it’s not difficult to create an attractive, eye-catching piece of direct mail – don’t worry, you don’t need to be a professional graphic designer. Above all, be sure to include a concise and snappy headline: a memorable phrase that engages potential clients and encourages them to do business with you.
Clear and high-quality images are also just as important. Blurry images look cheap and unprofessional. So, if you can’t find the right photo, you’ll need to consider purchasing one. Also, be sure to include a tempting offer – people need a reason to keep a hold of your mailer and not throw it away. So, for example, you may want to highlight a limited offer or a free gift.
Finally, your direct mail piece also needs to include a clear call to action (or CTA) – a prompt that encourages the reader to take direct, specific action. So, for example, you may want them to visit your website or contact you for a consultation. A CTA reduces the risk of your potential tenant throwing the mailer away and forgetting about you, and, ultimately, improves conversions. The more people you convince to follow your CTAs, the more tenants you’ll end up with to grow your real estate business.
Growing your real estate business can be challenging, but effective growth strategies make the process easier. By staging your properties, hiring a property manager, and embracing direct mail marketing, you can grow your real estate business from where it is now to a much higher level.