When people hear the word ‘farming’, they automatically think about agriculture. Real estate farming is not about growing crops, but a strategy for real estate lead generation. Many real estate agents have used this strategy of farming real estate to grow their real estate agent business and increase their earnings.
So, What Is Farming in Real Estate?
Real estate farming is one of the new trends in real estate marketing. It is a marketing strategy that involves planting and nurturing real estate leads with the intention of converting them into clients. There are two main real estate farming techniques:
- Geographic farming (also called geo-farming) – Geo farming is the practice of focusing your real estate marketing efforts on a particular neighborhood or area. A geographic farm could be a ZIP code, an entire town or a subdivision.
- Demographic farming (also called niche farming) – This involves targeting a particular demographic within your geographical farming area. For instance, you could target entertainers, first time buyers, doctors, distressed home sellers, or move-up buyers. However, when using niche farming, be sure to read and adhere to the Fair Housing Act. These laws protect citizens from being discriminated against based on disability, sex, color, race, religion, and more.
Farming a neighborhood for real estate begins with identifying potential homes for sale in a specific geographic area. You then build a relationship with property owners in the neighborhood through community involvement and regular communication. When the homeowners eventually decide to sell, you will be positioned to harvest the sales from real estate farms.
How to Select the Right Real Estate Farm Area
Your choice of a geographic farming area will be influenced by factors such as location, demographics, competition, turnover, and size. Here is how to select a farming area that will generate the best return on investment:
1. Choose an area close to your home
Prospecting in your own neighborhood is advantageous for several reasons:
- You are familiar with the area – When talking to real estate prospects, you will be able to answer questions about the neighborhood based on your local expertise.
- You already have connections – Since real estate agents interact with residents often in places like the mall, restaurants, and church, there is already a sense of trust.
- You will be the first to know when someone is selling – Through your networks in the area, you will know right away when a property owner is looking to sell.
2. Conduct some research on your farming area
Research will reveal if a real estate farm area is a place you’ll love working in and that will generate a good return on investment. Here are some of the things to consider when researching your farm area:
- The average age of residents
- The average income of property owners
- Employers in the area
- Common modes of transportation used
- Nearby amenities like schools, parks, clubs, and restaurants
- Types of homes in the area
- The number of newly constructed homes
3. Choose a geographic farming area with clear boundaries
Selecting a farm area with properly defined boundaries will help you market to and find quality real estate leads more effectively. Well defined boundaries, such as subdivisions and neighborhoods, will also prevent you from intruding into another real estate agent’s farming area.
4. Consider the size of your farming area
The narrower your target market, the more customized your messaging can be. If you are getting started in real estate farming, you can target 250 properties or less. This will lower your overall costs and enable more effective messaging.
5. Compare multiple areas
When getting started in real estate farming, compare multiple areas to see which ones have the highest potential. You can compare using metrics such as:
- Number of homes sold in the past two years
- Average sales price
- Average commission per sale
- Turnover rate
- Income potential
- Average days on market
6. Calculate the cost of real estate farming
The cost of real estate farming will depend on the number of homes in the farm. Let’s say you have 150 homes in your farm. Your costs could be as follows:
Web design – $1,500
One year of regularly scheduled postcards – $1,000
Facebook page – Free
Flyers – $600
One year of regularly scheduled letters – $400
2 sponsored events – $1,800
Total – $5,300
How to Become More Visible in Your Real Estate Farm Area
Once you’ve selected a suitable farm area, the next step is to establish yourself as an authority. Here is how you can make a name for yourself in the farm area:
1. Set up a professional website
If you are getting started as a real estate agent, an agent website is very important. Having a website gives you credibility and makes it easy for prospects to find you online. Even if you are not tech-savvy, you can use a web builder to create a professional site within minutes and start generating online real estate leads.
2. Get access to homeowner data
The best way to become more visible in your real estate farm area is to contact homeowners through multiple ways rather than just leaving postcards or letters in their mailboxes. For this, you’ll need to find homeowner lists with phone numbers and emails. Real estate farming tools such as Mashvisor’s Mashboard can provide you with just that. All you’ll have to do is sign up for Mashvisor and set the location of your real estate farm. Within minutes, you’ll have all the homeowner information you need for farming. You’ll also be able to email homeowners directly through the platform and send email templates to streamline your real estate marketing.
3. Attend local meetup groups and events
Getting involved in events and groups provides an opportunity to meet people and build relationships. For example, you could join the local football club or help raise money for charitable causes. Once you build rapport with people, they will trust you and seek your real estate agent services.
4. Participate in online real estate forums
Another great strategy for building relationships with residents in your farm area is by getting involved in relevant online real estate forums. Find out where people meet online and join the party. You can use neighborhood platforms such as Nextdoor, Front Porch, MyCoop, Olio, and Neighborland to connect with homeowners in your farm area.
5. Knock on doors
Though it can be very intimidating, knocking on doors is a simple and cost-effective strategy for meeting property owners in your farm area. The great thing about door knocking is that it provides an opportunity to engage real people face to face. You might even get a tour of the real estate property from the inside.
6. Create direct mail campaigns
Use an automated direct mail service like Lob, Postable, Cactus Mailing, SmartPress or Postalytics to send prospecting letters, postcards, or flyers to your real estate leads. You might have to send several mailings before getting a response.
Successful real estate agents are always looking for ways to generate more leads in order to grow their real estate business. Beginner and experienced real estate agents can use these real estate farming ideas to generate more leads.