In my experience, real estate farming can be one of the most lucrative and dependable lead generation strategies for agents. In this article, we’ll walk you through our detailed approach to farming, outline the costs involved, and review all the tools you’ll need.
To help you get started, we created the Ultimate Real Estate Farming Strategy Guide for those who want to dive in headfirst. Download our comprehensive, proven resource for all things farming!
Real Estate Farming 101
First thing’s first: What are we talking about here?
What Is Real Estate Farming?
Real estate farming is a lead generation and marketing strategy used by real estate professionals to generate consistent business from a specific geographic area.
Agents “farm” a specific neighborhood by providing consistent value and attention—and cultivating relationships—thereby generating leads that evolve into long-term clients and reliable business. Ultimately, the goal is to become the local expert and go-to agent for a particular neighborhood.
Why Is It Called ‘Farming’?
Think of what it takes to farm a big field of tomatoes. You need to select the field, plow the soil, plant the seeds, stake the plants, weed, prune, monitor, track progress, and eventually, harvest the tomatoes. It’s not a stretch to think about real estate farming in the same way: It requires careful preparation, attention to detail, and definitely some patience for the process to bear fruit.
What Kinds of Activities Constitute Real Estate Farming?
Farming activities include sending out direct mail, hand-writing letters, hosting events, sponsoring local activities, building a social media presence, and even knocking on doors to introduce yourself and your business. It involves anything that builds relationships and trust in your chosen territory and makes you a local authority there.
What Is Geographic Farming vs Demographic Farming?
There are essentially two types of real estate farming: geographic and demographic. Geographic farming means selecting a physical area to focus on, such as a neighborhood or ZIP code. Demographic farming is selecting a group of people, such as first-time homebuyers, seniors, military personnel, or even equestrians or golfers.
For the purposes of this article, we’re going to focus on geographic farming and walk you through the four basic steps for success. We’ll also cover the budget and tools you’ll need to get started.
Real Estate Farming Strategy
1. Target the Right Neighborhood
The success of your real estate farming depends on choosing the right area. A good farm includes between 250 and 500 homes (see our FAQ section for the “why”). Select an area where there’s healthy demand (a good absorption rate) and where homes are being listed for sale at a solid clip (a good turnover rate). Ideally, choose a place where you’ve got some name recognition and built-in local knowledge.
Pull together information on your farm area and get to know the market backwards and forwards. In addition to understanding average sales prices and days on market, you’ll also want to know the average age and income of homeowners, typical home styles and age, local employers, upcoming developments, zoning and permitting regulations, neighborhood amenities, and other local agents who might be competition.
Our Ultimate Real Estate Farming Strategy Guide has all the tools you need to choose the right farm area. We show you how to calculate absorption and turnover rates and offer tips on conducting geographic, demographic, and property research.
2. Plan How & When to Deliver Value to Your Farm
Agents crushing the real estate farming game deliver consistent value to homeowners in their farm areas. Successful outreach is more than papering the neighborhood with your branded message. It’s about offering something helpful to locals, like a market report, hosting a local event, organizing a social media group, or maintaining a neighborhood website.
The neighborhood website strategy goes a long way in establishing you as the local expert, but it also takes a lot of work. To make this easier, you might consider a tool like Parkbench, which creates an online website specifically geared toward farming. Community members get information about local events, news, deals, neighborhood happenings, and, of course, real estate—all brought to them by you, their go-to local resource.
See if Your Farm Area Is Available
3. Make a Plan to Manage & Track Your Leads
Your real estate farming leads are different from the leads you’d pay for or capture on your website, so be sure you’re tracking them separately. A solid real estate customer relationship manager (CRM) allows you to tag farm contacts, automate digital communication like email or text messages, and create a record of the value you’ve delivered over the life of your farming. Plus, you can carefully track each reply you send to ensure you’re promptly following up on every point of contact.
Our choice for the best real estate CRM for 2023 is LionDesk—it’s affordable and packed with real-estate specific features ideal for farming. Check out all our top CRM picks in our guide to the best real estate CRMs.
4. Execute Your Plan: Start Delivering Value!
You’ve chosen the right farm area, made a plan to deliver consistent value, and set up a system to manage and track your interactions. Now it’s time to set up your automated communications and start sending out high-touch outreach with postcards and market updates.
Successful real estate farming is a combination of long-term automated communication and smart, day-by-day, personal follow-up. If you treat farming as a set-it-and-forget-it strategy, you won’t be as effective. Be active in the communities you’re serving, and your clients (and your wallet) will thank you.
Social media doesn’t replace traditional farming techniques, but can go a long way in enhancing them. Many local neighborhoods have their own Facebook groups and homeowners associations with dedicated websites and social profiles, not to mention residents who are active on social platforms. The Close’s own real estate coach, Sean Moudry, suggests this proven, unique social media approach to farming:
Start by connecting with members of your farm area using your personal social media profile. Then, using Facebook, create a custom audience for specific posts that include only the people in your farm.
Sean’s strategy is great for promoting any neighborhood-specific content you’ve created for your website, like market updates or neighborhood guides.
Not sure where to start? PorchLyte is offering readers of The Close seven days of ready-to-go, customizable social media content for free.
Real estate farming requires a high level of organization, a solid plan for execution, and, of course, the tools required to consistently deliver value to your farm area.
Regularly Scheduled Real Estate Postcards
Direct mail is the backbone of your farming campaign. Postcards and flyers are the ideal tools to convey messages, statistics, and authority to your farm area.
Use direct mail to deliver quarterly reminders, but mix it up with a snapshot of the market, recipe, inspirational quote, joke, or sports schedule—anything that will provide value to your recipients. ProspectsPLUS! has dozens of geographic farming campaign postcards, perfect for quarterly mailings that keep you top of mind.
Check out postcards at ProspectsPLUS!
If your regularly scheduled postcards are a dependable, professional handshake, then on-demand postcards are your unexpected high-five. Use this marketing tool to make homeowners aware of market activity in their community, especially after a property sells.
Sending about 50 postcards to the homes in your farm area that are most similar to the market activity you’re highlighting is a wake-up call to homeowners. You’re providing valuable information and insight into their financial opportunities if they decide to sell as well.
?Look for spikes in your home valuation landing page traffic after you send these postcards!
If you don’t already have a postcard provider you work with, we like LabCoat Agents for their effective real-estate specific templates, including that perfect “just sold” postcard.
Visit LabCoat Agents
Farm-specific Content on Your Blog
Your farm area should have a dedicated section on your website where you can post weekly updates about the micro-neighborhood market, goings-on in the neighborhood, and even events in and around town. Your content can be short and sweet, with five or six sentences and a picture.
Remember, your website serves two purposes: to act as an online hub for your neighborhood and to show potential buyers that you’re the go-to expert. Placester offers a package that includes unique, custom content that you can add to your site, plus prewritten social media posts
Market Update Letters
A real estate letter can share in-depth, thoughtful market insights and analysis, but it’s also a chance to talk about what’s going on in your business or give shoutouts to those doing good work in your community. Share messages that communicate that yes, you’re the expert for buying and selling homes but, perhaps just as importantly, you’re also the expert at living in your community.
If you’re farming a luxury, higher-end neighborhood, consider handwriting your letters. The personal touch provided will pay off in spades with discerning sellers. Don’t have time? Addressable will craft the content, use its proprietary technology to recreate your handwriting, and mail out the letters for you.
Collecting and communicating information relevant to your farming community is the best way to use a neighborhood-specific website. Try including interviews with neighborhood business owners, local news, coupons, and, of course, all the latest information about the real estate market.
Your neighbors are unlikely to spend much time perusing your personal website because they see it being all about you. But a website focused on their neighborhood is about them, making it much more appealing!
As we mentioned earlier, our suggestion for this sort of platform is Parkbench. Parkbench power users may create content every week (if not more), but posting once or twice a month is great for agents who are just getting started.
Get Started With Parkbench
Door Hangers for Your Annual Door-knocking Session
Door-knocking isn’t everyone’s cup of tea, but it’s helpful to remember that you’re not going into these walks around the neighborhood cold. By the time you kick off your door-knocking weekend, residents will have heard from you multiple times. They know of you, even if you haven’t met yet, and they should be familiar with the value you’ve provided so far.
Your farming efforts will be significantly more effective if you’re intentional about getting face-to-face with the people in your farm. Leave a little something behind, like these brand-friendly templates that can be easily customized. Purchase a template on Etsy or create your own with a free account at Canva.
Try Out Canva
Whether you’re throwing a summer block party and BBQ, a holiday gathering, wine tasting, or a Super Bowl watch party, events are a fun way to meet and greet community members.
If you’re new to events, start with something you know will be a hit, like a pumpkin giveaway in October or a trivia night with great prizes. Or, try sponsoring a neighborhood garage sale, a community fireworks display in July, or a community service project with plenty of food and drinks afterwards to celebrate all that hard work.
What Does It Cost to Get Started?
You can expect upfront costs for effective real estate farming, but the returns will repay your investment many times over if you stay consistent. Typical annual costs for a real estate farming operation with 250 homes look like this:
While this is a sizable investment, don’t forget to look at the big picture. If you’re farming a neighborhood where the typical home sells for $400,000, a single 3% commission equals $12,000 in gross commission income.
In this case, a single property sale would recuperate your approximately $8,000 investment—and then some. If you’re turning over three or four transactions a year from your real estate farm area, the positive return on investment is clear.
Real Estate Farming FAQs
Why should my real estate farm be 500 homes or less?
When it comes to real estate farming, bigger is not always better. Geographic real estate farming is an effective marketing strategy because you target a specific set of homes with a message that adds particular value. The bigger the selection of homes, the less likely you are to deliver messages that appeal to all homeowners in your farm area. Keep your farm small so you can focus your message and deliver more value.
How much of my real estate farming message should be about the local market?
Market conditions and specific statistics can be powerful conversation starters in your real estate farm. However, these types of messages can get boring pretty quickly for anyone who’s not actively ready to buy or sell. So, we suggest using this general rule: Make 30% of your message about the market and the rest about the community.
What kind of results should I expect from my real estate farm?
It’s important to track your efforts to determine the return on investment in your particular farm, because every market is different. Your success depends on area-specific information, including the types of homes in the market, the sort of agent competition you’re facing in your neighborhood, and how long you’ve been active in the area.
How long does it take for a real estate farm to produce results?
Real estate farming is not a strategy that produces overnight success. Though you may see some exciting immediate returns on your efforts, the leads you capture in the first three months from your farm are likely to be people who were ready to buy or sell anyway. True farming success takes time. Give yourself a year with this strategy before analyzing and making changes based on your results.
Bringing It All Together
Real estate farming is an effective means of prospecting and developing a consistent source of seller and buyer leads. The best part about farming is that the rate of return on your investment improves over time as your messaging gets sharper, more people recognize you, and your sales stats in the neighborhood improve.
Have a real estate farming idea we didn’t cover? Let us know in the comments!