4 Mistakes Real Estate Investors Make Getting Started With Google Ads
Google Ads has been a powerful tool for real estate investors for years. Motivated sellers take to Google every day in order to find a solution to a problem that they have. Google Ads allows serious investors to show up at the top of page one search results and provide solutions to those problems. Since Google Ads is a pay-per-click platform, any investor with the right strategy can make an impact in any market. So why doesn’t everybody do this? Tons of investors run into roadblocks in one way or another that either keeps them from running a successful Google Ads campaign or keeps them from starting at all. These are four of the biggest mistakes that I’ve seen many real estate investors make when getting started with Google Ads for lead generation:
1. Not Setting A Realistic Budget
In the 6+ years that I’ve been running Google Ads for real estate investors, budget has played the biggest factor in success and failure. No, Google Ads is not a platform that you just throw money into and get results out of. However, having a realistic budget does influence a large part of ad placement and competitiveness in campaigns.
Let’s say you are targeting a market size of 1.5 million people. I’ve worked in tons of these markets nationwide and they are some of the most consistent ones as far as spend goes. I almost always recommend a click budget of $3,000/month to start. Why?
Clicks in markets can range anywhere from $25/click up to $45/click on average. If I grab a number from in that range, let's say $30, then you would expect to get around 100 clicks. If we take a general conversion rate goal, mine is 10%, and apply it to this equation then we would expect to get 10 people interested in selling their house to you. At least one of those leads should become a deal that nets you a profit.
A budget of $5/day won’t get you anywhere close to generating leads in a market like this, or any market for that matter. Google Ads isn’t something that you can just “dip a toe into” and see how it goes. You have to commit a serious budget to a serious strategy if you’re serious about generating results (that’s super serious!). Before launching a Google Ads campaign, consult a professional on what an ideal budget looks like in your market.
2. Not Allowing Time For Results
Waiting can be frustrating. Waiting for direct mail responses, waiting for sellers to return calls, waiting for ads to start showing; they can all cause a lot of stress. The key with any marketing channel though is to give it enough time to provide data worth making a decision on. Google Ads is no different.
Google Ads can take 7-10 days to start showing your ads at all. Google gradually starts giving brand new ad accounts impressions after a short “probationary” period. After that, your ads will start to show. It may take a couple of weeks after that for your keyword bids to start getting competitive with what other investors are paying (depending on whether you are bidding manually or automatically.
So now you’re into Google Ads for 2-3 weeks and haven’t seen much in the way of results. This is about the time that meaningful clicks start to come in. This is when your clock should actually start for measuring Google Ads performance. I’ve seen so many real estate investors frustrated with their Google Ads accounts after the first month because not too much has happened. There are tons of factors that can contribute to this, but realistically the first month is almost all watching and waiting.
What is a solid wait time to determine how well Google Ads is working for your real estate investing business? Three months. Three months is long enough to identify trends in any form of marketing. You may have one low month and one high month to start. Looking at the third month, and then evaluating all three months together should paint a much better picture than just one, or even two, months.
3. The Target Market Is Too Small
This is one that I see pretty often, but in a few different ways. Real Estate Investing as an industry requires a certain amount of demand for service. I know tons of real estate investors that are great salespeople! They can walk into a retail situation and leave with a contract, or with the seller seriously considering a cash offer at minimum. However, they can’t work that magic if demand isn’t there.
A real estate investor can be the only person making cash offers in a market, but the demand has to be there. For example, the amount of homeowners looking for a cash offer in a city of 5,971 people is going to be extremely low. There are going to be a much higher number of people looking to sell their homes for retail value with a realtor because that’s the norm. No demand, no clicks, no leads, no deals.
It isn’t impossible to find deals in smaller markets. I mean, maybe you only get five clicks a month, but if at least one of them is truly motivated and ready to sell for cash then you’ve probably made 10X what you spent in marketing. The probability is just really low. If you’re looking at targeting a smaller market, consider being as broad in your area reach as possible to start.
4. Not Prepared For Lead Intake
This happens more often than you think! A new real estate investor decides to get a website and start a Google Ads campaign. They have a great target area, and the right budget to get results. Two months into the campaign the leads are starting to come more regularly. A couple of them are under contract and ready to be flipped! That’s when things start to fall apart.
The investor starts to flip one property and then the other. They are actively trying to manage two crews on two different sites. The phone is continuing to blow up with texts and phone calls. Some of them get missed and don’t leave voicemails, which are now missed opportunities. Appointments are made for some of the leads that are coming in from Google Ads, while others are lost because there isn’t a follow up process.
Yeah, this seems like a nightmare. It totally happens. I’ve personally managed Google Ads accounts for investors who didn’t have solid follow up processes, who couldn’t manage their business as a one person show, and who didn’t have enough knowledge on exit strategies to make the most out of leads coming in.
Be prepared for leads! Have plans and processes in place to handle any number of leads based on your business size. Be realistic about what you can and can’t handle before starting a Google Ads campaign. It’ll help you maximize your marketing dollars, and reduce the number of headaches that you end up with later.