How can a landlord effectively use advertising to find tenants?
Ask several experienced landlords about advertising and they’ll tell you it’s a waste of money. But it’s not true. In certain circumstances, where other free methods are inadequate, a landlord can use advertising to give their real estate investment that extra little push toward positive cash flow. The key is understanding how to focus your advertising on the right people with the right message.
Who is your target customer? This is the central question for every marketer. If you understand your customer, you can figure out where to find them and how to convince them to buy your product. As a landlord, your "customer" is a tenant and your "product" is your house. A great exercise is to imagine the person renting your house:
- Where do they work?
- Are they married?
- Do they have children?
- What do they read?
- Where do they shop?
Keep thinking about it until you can see the person clearly.
Smart Landlords Use Niche Advertising
Once you can see your tenant, advertise directly to them. Here’s an example from a real estate investment I’m trying to sell (the same principles apply, whether you’re trying to find a buyer or tenant). The house has one of the nicest waterfront lots on a lake with over 600 miles of shoreline. It’s small and modest, but the lot and location are unbeatable. Who is going to buy the property? Not a young executive; he or she will want something flashy. Not a large family; they’ll want something bigger.
The buyer that wants my house is probably a middle-aged couple with kids in college that likes to have outdoor barbecues and ride around on their boat for the weekend. It’s perfect for them. So, where do I advertise? Marinas, boat dealerships, Lakeside restaurants. As a result, I’m getting about a dozen calls a day from very interested buyers. And it only costs a few hundred dollars. The local newspapers would charge me at least $1000 a month for a decent ad, and it wouldn’t get half the pull.
Using Mass Media Advertising to Draw Tenants
So, am I saying the mass media is worthless? No! You just have to know how to use it. In my opinion, newspapers and magazines are useful in two situations: when you need to market more than one property and when your property has a broad appeal. For example, if you are a landlord with 30 houses for rent, it’s worth paying a few grand per month for a full-page ad in a newspaper or magazine. You’ll get lots of calls and then you can funnel those people into individual properties.
Another reason to use mass advertising is when you have a large potential pool of buyers. If you just bought a condo in the hottest building in town, it’s worth paying for a short-term but broad advertisement to let everyone know. Hopefully, you’ll bring in multiple qualified tenants and start raising the rent as they compete over your property. You’ll make your investment in mass advertising back in a heartbeat.