Cost per signed lease came out to $1,270 when the leasing fee was cheaper

Four unit turn in a small multifamily building, all four vacant at once after a roof job pushed everyone out on schedule. I decided to skip the local leasing agent and hire a marketing shop that does rental lease up work, partly out of curiosity about whether paid traffic beats the listing sites in a small market.

Numbers. $900 setup for photos, a single property page, and tracking. $2,900 media over six weeks split between Meta and Google. 38 inquiries, 11 tours booked, 7 tours actually happened, 3 leases signed. Fourth unit leased through a sign in the yard and a neighbor's cousin. So $3,800 divided by three leases is $1,266 a lease. The leasing agent in that town charges half a month, and my rents are around $1,150, so roughly $575 a lease, plus she already has a waiting list.

The part I got wrong was assuming the constraint was demand. It was not. There were plenty of renters. The constraint was that qualified renters in that town find units through people, and paid traffic mostly brought me applicants from 50 minutes away who ghosted after the drive. Two of the three signed leases came from Google searches on the town name plus apartments, which is a search a leasing agent's listing would have caught anyway.

What I would do differently: use paid channels where the listing sites and the local agent have thin coverage, and pay the leasing fee where they do not. If I test this again it is one unit, not four, and I hold the agent for the rest.

4 replies

3stephen_ok9CO2CPRO6

The comparison you ran is cleaner than most, because you had a real alternative price for the same outcome. What I would add is that the $575 leasing fee also buys you her waiting list and her screening time, which never shows up in the cost per lease number. Paid traffic hands you unscreened strangers and the labor of sorting them stays with you.

2dpatel_reCS4A

Vacancy days are missing from the arithmetic. If the campaign filled three units two weeks faster than the agent would have, that is roughly $1,725 of rent at your numbers and it changes the conclusion. If it filled them at the same speed or slower, the $1,270 is the whole story. Do you know the timing well enough to say?

1ehernandez74PO2BPRO5

@sextant that is the question I had too. Six weeks of media for four units sounds slow for a small town, but I have no reference point for what normal is.

1laurenkim53Passive

Rural and small town lease up runs on the same mechanism you described, people telling people. In the towns I look at, the effective channels are the local buy and sell group, a yard sign, and whoever manages the other buildings on the street. Paid search on the town name plus apartments works because the search volume is tiny and cheap, so you own the whole term for very little. The Meta half of your spend was probably where the 50 minute drive applicants came from. I would run the Google side again alone at a fraction of the budget and keep the agent, and I would expect the cost per lease to look completely different when the media number is $300 instead of $2,900.

Cost per signed lease came out to $1,270 when the leasing fee was cheaper

4 replies