5 Steps to Picking the Perfect Real Estate Farming Area

Farming is a fantastic prospecting tool for real estate agents looking to gain market share in a specific area. But before you even start thinking about what farming activities will help you succeed, it’s important to spend the time and energy picking an optimal area. That’s where this article comes in to help.

As you start researching potential areas to target, go through the below five steps. Keep in mind that these steps are meant to guide you, but your strategy should be agile. Even after you decide on a farm, be willing to make changes as you see what’s working and what isn’t. The market and neighborhoods are constantly in flux, so don’t get stuck if things aren’t going your way.

1. Aim for a 10% turnover rate. 

Perhaps the most important part of farming is picking an area with a reasonable turnover rate. A rate around 10% is a great goal to keep in mind. You want enough turnover to keep your business going, but not so much that there may be red flags pushing people out.

Another factor to consider when it comes to turnover is the volume of absentee owners and tenants in the area. When there are higher rates of absentee owners and tenants, you might find a lot more potential to grow your database in a meaningful way.

Overall, you want turnover rate to be an important factor but not the only one. While in past years, you may have felt tied to looking for areas that sold 100+ homes last year, it might be harder to find in today’s market. It’s okay to be more flexible and consider sales from the last two or even three years in your search. The important thing is that you feel confident in the area you choose. 

2. Research what drives people to the area.

Of course you want your farm to be in a desirable area. But that can mean a variety of things. The area may have great schools, popular restaurants, attractive parks, or an abundance of businesses. Understanding what drives people to the area will help you decide if it feels right for your client base. In an ideal scenario, there are multiple factors that make the area appealing.

This part of the process is also essential for your farming activities down the line. You want to be an expert in the area and all it has to offer. Find a local newspaper or newsletter, attend community events, and walk around town. Compile a rolodex of recommendations and information to share with potential buyers.

3. Make sure the area is accessible.

If you don’t already live in your farm area, you need to consider how accessible it is to you. You’ll be spending a lot of time there, and you want it to be convenient. You might consider choosing an area close to your office if it’s not close to your home.

You’ll also want to avoid any gated communities that you don’t live in. Cross off any areas that require a code or special permit.

4. Gather contact information.

Once you start your farming activities, you’ll want the names, emails, phone numbers, and addresses for the residents you plan to contact. This is where a relationship with a title company is very important. It can be helpful to request this information earlier in your farming process to make sure it’s available and aligns with your assumptions about the area. Don’t be afraid to lean on your title partners as you research!

5. Understand the value you offer.

The final important step when choosing a farm is building your own value proposition. You’ll want to be confident that you can bring significant value as an agent in the area. Consider the competition that already exists and what niche you may be able to carve out for yourself. Think about your strengths as an agent and if they align with the clientele you plan to work with.

Remember: your farm is also a great source of referrals! Make sure you can be a trusty resource for the people you contact and they will engage in one way or another.

Lastly, I always suggest looking for a farm that is large enough to be a great opportunity but small enough to be approachable in terms of workload. Aim for 300-500 people to start. Spend the time thinking through these steps now, and you’ll reap the benefits for years to come!

About the Author

Aaron Hodson is a keynote speaker, business strategist, and CEO of SellWell. He’s spent 25+ years in the real estate industry in various capacities — from selling homes, to becoming CEO of one of the fastest growing real estate companies in the world, to coaching high-level sales agents and executives. Fair warning: Aaron originally hails from New Zealand, so Kiwi-isms are to be expected.