November 22, 2023

Expert Series: Demystifying Budget Allocation and Timelines for Build-to-Rent Marketing

The growing popularity of build‑to‑rent (BTR) properties brings forth a unique set of challenges and opportunities for digital marketing agencies and their clients, and understanding the intricacies of budget allocation and timelines plays a crucial role in that. We sat down with Aaron Fichera, SmartTouch® Interactive’s Chief Operating Officer for some insights into the strategies employed and the considerations influencing success in the build‑to‑rent market.

Crafting a Customized Budget

One of the first questions asked dealt with the budget requirements for a comprehensive digital marketing plan. And while budgets are specifically tailored for each property, Aaron notes that the typical range falls between 1 to 3% of annual revenue dedicated to marketing spend.

For build‑to‑rent in particular, this becomes more nuanced: “There’s going to be a lease‑up period in which you’re going to see the most use of your funds,” Aaron says. “That’s when you have the lowest occupancy, but you want to increase that occupancy by putting more funds in and increasing leasing velocity.”

Following that lease‑up phase, the budget shifts some of its emphasis from driving traffic to maintaining relevancy and visibility while accounting for seasonality – often‑overlooked elements of the digital marketing cycle.

Understanding the Timeline

Our interview with Aaron also touched on expectations regarding timelines for implementing marketing strategies and how clients are kept informed. The process begins with a discovery call, during which the agency gains an understanding of the property’s needs and current program metrics.

A communication calendar is then developed to align with brand and strategy, and campaigns are structured accordingly. The goal is to have everything in the market by the first of the month, with regular stakeholder meetings to review, track, and report against metrics:

“Typically, we are creating content a month in advance. So, the 10th or the 15th of the month prior, we’re sitting down, meeting with the client, and we’re talking about what is the upcoming month’s strategy? Are there any changes, working with the property management, or the investment firm, and understanding how many lots are available? What’s the leasing velocity? What are the amenities, or new events coming down the pipeline? And then we cater our content to drive traffic, or to align with the current cycle of that property.”

Seasonality’s Impact on Budget

The conversation moved to the impact of seasonality on BTR and rental marketing spends. Aaron emphasized that, like the traditional home‑buying market, seasonality does play a significant role – young families, in particular, tend to be more active in their search during the spring and summer months due to school schedules.

However, life‑changing events, such as new jobs, separations, or kids going off to college also play a role in those decisions, and are less affected by seasonality – the key is to stay attuned to property availability and adjust marketing strategies accordingly.

Key Performance Indicators (KPIs) and Metrics

The interview also shed light on the critical KPIs for measuring success in digital marketing for the BTR space. Leasing velocity and occupancy rate emerged as the primary metrics, directly influencing the allocation of marketing funds, and the 1‑3% rule of thumb also aids in determining the budget required to reach full capacity and mitigate potential revenue loss during low occupancy periods. Aaron offers an example:

“Let’s take a typical community that may generate $250,000 in revenue a month. Having a unoccupied space will cost that entity around $83 to $87 a day. If the occupancy rate is at 80%, then that means that it will cost that builder or build‑to‑rent community close to $40,000 a month if there’s a vacancy rate of 20%.”

Data‑Driven Decision Making

At the core of any successful digital marketing strategy is an emphasis on data‑driven decision‑making. Regular meetings that involve analyzing metrics and adjusting strategies based on factors like seasonality, leasing velocity, and occupancy rates create a proactive approach ensures that marketing efforts align with the property’s current status and market conditions.

By partnering with a team that embraces data‑driven decision‑making and stays ahead of market trends, clients can confidently navigate the competitive landscape of the build‑to‑rent market.