How to Nail Your Multifamily Marketing Budget as Budgeting Season Approaches

Your community’s marketing budget is often one of the largest factors in driving revenue and profitability. As a result, you’ll want a budget that provides the foundation for sustainable traffic, occupancy, and revenue, while being efficient enough to ensure your property reaches its profitability goals.

How do you decide on an appropriate marketing budget? Try working backward. When you’re creating your annual forecast, first determine your profit margin goal. After that, consider what expected revenue would look like if you met your occupancy goals, and deduct your profit goals to determine your overall operational and marketing budget.

Factors That Determine Your Marketing Budget

Here are a few variable factors to consider when deciding on an appropriate marketing budget for a specific community.

Unit Count

Having available units requires you to generate consistent quality prospect traffic to maintain a desired occupancy level. A larger unit count also provides more revenue, which can help fund a higher marketing budget. Some companies use an overall cost per unit as a benchmark for setting their budgets.

Class of Property

Premier properties are more likely to have higher rent rates, allowing for a larger marketing budget. Lower-income communities tend to have smaller budgets and potentially smaller profit margins.

Local Competition

Every geographic market has a different level of competition. A more competitive local market will require a more aggressive marketing approach to maintain sufficient qualified prospect traffic. When it comes to online advertising, the amount of local competition has a great impact on paid search campaigns and can also require more costly package levels for Internet Listing Service (ILS) advertising to reach your ideal audience.

Current Occupancy

Current occupancy is more of a month-to-month budget consideration to determine if there is an immediate need for more traffic. If you’re in a good place with occupancy, you can find opportunities to proactively lower your spending on digital ad campaigns. A lease-up community that starts at 0% occupancy should be aggressive with their spending to fill the property as quickly as possible. When planning your annual budget, determine a baseline monthly plan that can be adjusted as needed.

Allocate Your Advertising and Marketing Budget

In the course of consulting and supporting property owners and managers, multifamily marketing agency Dyverse commonly sees its client partners invest as much as 45 to 55% of their marketing budget toward digital advertising, search engine optimization (SEO), and ILS advertising.

Website Optimization, Digital Advertising, and SEO Campaigns

Allocating your budget to paid Google Ads search, display, and video placements; and social media ad campaigns is fairly standard to maintain consistent traffic. Depending on your budget size, some of these items can be omitted or only used when additional traffic is needed.

ILS Advertising

Just like choosing which campaigns will provide the best returns for digital advertising using Google and Meta ads, deciding which ILS sites to invest in will be a key decision.

Other Leasing and Marketing Essentials

Clients can then apply the remaining 45 to 55% of their promotional budgets to other leasing and marketing essentials and miscellaneous expenses necessary for a successful marketing and leasing operation:

Be Proactive with Ongoing Budget Optimization

Although many of your marketing budget items might be predetermined or a part of a longer-term contract, there may be times when you can save money because traffic generation isn’t a priority.

With digital advertising campaigns, we recommend reviewing occupancy trends and move-out forecasts to determine how much exposure you may require at different time of the year. If your predict lower traffic requirements, consider spending at lower levels or even pausing campaigns until more leads are needed for your prospect pipeline.

Having an up-to-date budget versus a cost report will also help you keep track of your annual budget projections and decide if you should adjust your expense forecasts for the following year.

Improve your Annual Budgeting Process

This article provides a simple overview of how to build your yearly marketing budget. If you need help planning your advertising and marketing budget to earn the best NOI possible for your portfolio, the team at Dyverse would love the opportunity to collaborate with you.