Real estate farming traditionally targets a specific geographic area of buyer or seller prospects to generate leads and then nurture them to convert into customers.

However, in times of digital marketing, there is much more to it.

So, in this slightly shorter article, I will dive into…

  • What the real estate farming approach is
  • What demographic and digital farming is
  • Real estate farming turnover rates and why they are important for geographic farming
  • Whether real estate farming really works


What Is Real Estate Farming [The General Approach]?

Real estate farming is the label of a particular marketing strategy for lead generation.

The term “farming,” known from agriculture, is used metaphorically to describe the effort of “growing” a real estate customer base in a particular real estate niche.

It refers to which criteria you use to target a particular group of potential buyers or sellers with your lead generation methods.

Staying with the complete metaphor of “farming,” it is not only about targeting a particular group.

To grow some “real estate customer crops,” you must nurture them.

So, “real estate farming” also includes nurturing and running follow-up campaigns to convert the generated real estate leads into customers.

Practically, you regularly run a real estate lead generation campaign for a specific target group and nurture the leads you generate.

If you select the target group under geographical conditions, you also want to get involved in the community.

Real estate farming is not limited to a particular type of lead generation method (e.g., only paid and “free” outbound lead generation).

The main characteristic is focusing on a specific target group with your chosen lead generation method.

Ideally, selecting the target group informs your lead generation method and messaging (e.g., the sales copy).

In a traditional sense, you may have thought of direct mail and additional offline prospecting methods.

This is because these lead generation methods are often mentioned when you read about real estate farming or watch videos on the subject.

The traditional targets, such as specific geographic areas, are also mostly mentioned.

Why is that?

Before the digital age, real estate farming was more associated with targeting a particular geographic area.

This is understandable since you didn’t have many other options to segment or target a specific group of buyers or seller prospects.

And what lead generation method could best be used for that?

It’s direct mailing.

That’s my explanation of why real estate farming is still often associated with targeting a particular geographic area and using direct mail.

However, since the digital age or the existence of digital marketing, it is a limited way of seeing it. 

Yet, it is understandable why it still is that way.

So, again, real estate farming today is about focusing on a specific target group.

And yes, you can still select a target group purely based on geographical conditions, as in the good old days.

But the selection criteria have broadened, and a particular geographic area is only one of many additional conditions and attributes you can use.

Selecting the target group can also depend on additional factors, criteria, or attributes. To name only a few:

  • Local demographics (e.g., income levels, employment status, age ranges, length of homeownership, etc.)
  • Local amenities
  • Competition
  • Turnover rates and average sales prices
  • The level of desirability
  • The area size (e.g., number of homes)

As you can see from the above, today’s real estate farming is about real estate marketing or lead generation targeting a particular buyer or seller niche.

You could add even more criteria and attributes by using the categories I mentioned in my article about real estate niches.

The following are the categories you could also use as “farm types”:

  • Farm by property type
  • Farm by contract type
  • Farm by retail/investor need
  • Farm by seller situation

For additional ideas about attributes and criteria, you may want to read my article “Real Estate Niches, and How to Get a Profitable One. “



What Is Demographic Farming in Real Estate?

Now we can also explain what demographic farming is in real estate.

Demographic farming targets buyer and seller prospects based on specific demographic characteristics for real estate lead generation campaigns.

The characteristics of the demographic target group can be the following:

  • Age ranges
  • Income levels
  • Length of homeownership
  • Education
  • Employment status
  • Religion
  • Gender
  • Health and disability status

The targeted demographic can but doesn’t have to belong to a particular geographic area.



What Is Digital Farming in Real Estate?

When you run real estate farming campaigns only via digital marketing channels to target specific buyer and seller prospects, you do digital real estate farming.

The same principles apply to standard real estate farming, and the only thing that shifts is the focus on digital marketing methods and the exclusion of offline methods.

The excluded lead generation methods are usually the following:

Still, you don’t need to see this as too rigid.

The main thing to remember is that the focus for digital real estate farming is usually digital marketing methods.

However, you can still combine them with traditional ones.



Real Estate Farming Turnover Rates, a Critical Metric for Geographic Targeting

The real estate farming turnover rate is a geographic real estate farming metric helping you determine what specific neighborhood to focus on.

How is it calculated?

It is calculated by dividing the number of sales in the last 12 months by the number of homes in the area.

The result is the turnover rate for a particular neighborhood.

Why is this metric beneficial if you want to run geographic real estate farming campaigns?

As a realtor, you earn commissions by the number of real estate transactions you can close in a certain amount of time.

So, when you identify a neighborhood with a high turnover rate, you know that more transactions are happening compared to a different neighborhood with a low turnover rate.

It gives you a better basis for deciding which neighborhood(s) to focus on for your real estate farming efforts.

Besides this, the turnover rate can also help give you additional information about your overall real estate marketing strategy and goals.

Once you know it, you can… 

  • Project your gross commission from listings
  • Calculate the number of leads you need to reach your commission income goals.
  • The monthly budget you need for lead generation
  • Estimate if the particular neighborhood alone is feasible for your goals or not and if you need to broaden your target group



Does Farming Really Work in Real Estate?

Whether farming really works in real estate depends on many different factors.

That’s why the question can’t be answered simply with yes or no.

As you can learn above, you have all the different real estate lead generation methods at your disposal in real estate farming.

The target group you want to farm informs the lead generation method and the messaging, including the sales copy you preferably use.

Based on that, you will have to deal with the following factors that make or break your real estate farming efforts:

  • Your annual gross commission goals
  • The time frame in which you want to reach your gross commission goals
  • The criteria of the target group you use (geographic, demographic, etc.)
  • If you focus on geographic real estate farming, the turnover rate of the particular neighborhood you are targeting.
  • The prospects’ awareness stage you target.
  • How well you select the right marketing channels and match the sales copy with the respective awareness stage of the prospects you are targeting.
  • Your monthly marketing budget.
  • How well and fast you can optimize and iterate your marketing campaigns (e.g., A/B testing) highly depends on your budget and the time frame for your gross commission income goals.
  • How effective you can run nurturing campaigns to the real estate leads you generate.
  • How well you can convert leads into customers in personal conversations (e.g., your sales skills over the phone.

So, real estate farming can work if you consider the vast array of factors that inform the success rate and get them right and well aligned.

This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.

Tobias Schnellbacher