6/22/16 Update: We have an updated list to this article that you can find by clicking below –
Today our topic is rather exciting. We’re talking about the 5 best cities to grow or start a property management company. If you’ve been thinking about expanding into other metro areas, we have some great ideas for you in this blog.
Before we get to the list, it’s important to understand our methodology. We are a marketing company. At Fourandhalf we help property managers market for new owners. That’s our only job; we stay focused on this area of expertise. Therefore, the criteria we used is directly related to customer acquisition costs through digital marketing.
You’ve probably heard us use this value before: the lifetime value you get from a single property owner with a single house is $4,500 or more. When you calculate monthly management fees, lease-up fees and other things you charge, you can see that over the lifetime of a contract, your customer is worth $4,500 or more to you. Our conclusions in this blog are based on the money you’ll need to spend in order to acquire that one new property management contract. The lower the cost, the cheaper it will be to grow a property management company in a particular market.
Our research was conducted using public information. We put together data gathered through Google’s keyword tools and other searches. With this research, we can tell you how many monthly searches there are for property management services in each area and what the cost is to run a Google Adwords campaign in that city.
One caveat to remember: our customer acquisition costs are based on professionally-run Adwords campaigns that include a landing page. Campaigns that don’t use a landing page are less effective, and thus drive up the customer acquisition cost.
5 – Memphis, TN
There are an average of 600 people searching for property management services in Memphis every month. Currently, it costs you $3.90 to place a bid on Google Adwords and get that click. The estimated acquisition cost for a property manager to gain a single client is $350. That’s a pretty good number given your lifetime customer value of $4,500 or more. It gets better:
4 – Miami, FL
There are about 600 searches per month in Miami and the average bid is $4.05. Your estimated acquisition cost is $320. There’s an important organic element in Miami: the Google pins (Google’s local search results) are fairly open. When you search for property management companies in Miami, there are only two companies with great Google+ pages that include online reviews. So with only two Google pins being used, there’s a real opportunity for four more property management companies to show up on Google’s front page.
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3 – Raleigh, NC
We registered an average of 700 monthly searches for property management services in Raleigh, and the average bid is just $3.00. So, your customer acquisition cost is $270, a ridiculously low number compared to other markets. There is also a valuable opportunity for pins, as well. There are three companies with Google pins now and three more can show up organically without too much effort.
2 – Sacramento, CA
Now we’re getting into the major leagues. In Sacramento there are 4,000 monthly searches. That’s probably more than any other city in U.S. The average bid on Google Adwords is $3.15 because of that volume. So, we estimate your new customer acquisition cost at $260 per management contract. This is a great market to launch a professional Adwords campaign. However – it’s not great for organic growth. A number of really strong companies are already using the Google pins so that front page is crowded. It’s difficult, to rank there, but not impossible.
1 – Albuquerque, NM
By far the best market for a new or growing property management company is Albuquerque. With 1,400 average searches for property management services every month, and an average bid of $2.80, that gives you an estimated cost per contract of $240. Only two companies are established in the market with pins on the front page of Google. That means you have a huge opportunity to rank organically and a huge opportunity to gain some new clients with Google Adwords. In our professional opinion, this is the best city to grow your property management business in 2015.
The Most Expensive City to Start a Property Management Company?
As a contrast, let’s talk about the most expensive city: Phoenix. In Phoenix, there area solid 1,400 monthly searches, but with an average Adwords click will cost $15.15(!), new client acquisition will cost you around $1,200.
If you need help, Fourandhalf is here to help you grow your property management business in any market. Contact us at Fourandhalf – Internet Marketing for Property Managers.