Real estate & rental
Real Estate Agent Ad Spend Calculator
Works ad spend against what it produces, where the fair housing rules constrain the targeting.
Result
Simple payback, with no discounting and no financing cost. For anything large or long, money now is worth more than money later and a lender will want interest, both of which make the real return lower than this.
Get a Free Business AuditHow the calculation works
Spend across channels against leads, clients and closings produced, giving cost per closing and the return against compensation earned. Working backwards from the closings needed and the conversion rates gives a budget that relates to a target rather than a figure chosen by habit.
What moves the number
- Closings needed and the conversion chain.
- Cost per lead by channel.
- Average compensation per transaction.
- Attribution, which is difficult over a long cycle.
Where this one goes wrong
Housing advertising is subject to fair housing requirements, which restrict both the content of an advertisement and how it may be targeted, and digital platforms have changed their housing ad tools specifically because of this. Audience targeting that excludes or limits by protected characteristics, including proxies for them, is unlawful regardless of intent. That is a constraint on the campaign rather than on the arithmetic, and it is worth understanding before setting one up.
Before you quote
- Use the housing-specific ad tools platforms provide.
- Avoid targeting that excludes by protected characteristics or proxies.
- Measure cost per closing rather than cost per impression.
Where the rules come from
Questions
About this calculator
Are there rules on how housing ads can be targeted?
Yes. Fair housing requirements restrict both content and targeting, and major platforms have changed their housing ad tools specifically for this reason. Targeting that excludes by protected characteristics or proxies for them is unlawful regardless of intent.
What should ad spend be measured against?
Cost per closing and the compensation those closings produced, not impressions or leads. The chain from spend to closing is what determines whether a campaign paid, and the earlier metrics can all look healthy while the last one does not.
How should a budget be set?
By working back from the closings needed through your conversion rates to the leads required and their cost. A budget derived that way relates to a target, where a figure chosen by habit relates to nothing in particular.
The formula
payback = cost / (monthly gain - monthly running cost)
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Please keep the attribution line. It is the only thing we ask in return.
How to use this calculator
- Up-front cost ($). Enter your own figure; the page starts at $12,000.
- Extra gross profit per month ($). Enter your own figure; the page starts at $1,400.
- Extra running cost per month ($). Enter your own figure; the page starts at $220.
- Period to judge it over. Enter your own figure; the page starts at 36.
The result updates as you type, so you can try a figure, see what it does to payback period, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Up-front cost | $12,000 |
| Extra gross profit per month | $1,400 |
| Extra running cost per month | $220 |
| Period to judge it over | 36 |
What comes out
| Result | Value |
|---|---|
| Payback period main result | 10.2 |
| Net gain per month | $1,180 |
| Net return over the period | $30,480 |
| Return on investment | 254% |
It pays for itself in 10.2 months and returns $30,480 over 36 months, a 254% return.
How sensitive the answer is
Holding everything else steady and changing only up-front cost, this is what happens to payback period. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Up-front cost ($) | Payback period |
|---|---|
| $6,000 | 5.1 |
| $9,000 | 7.6 |
| $12,000 example above | 10.2 |
| $18,000 | 15.3 |
| $24,000 | 20.3 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Up-front cost ($)
- A money amount, starting at $12,000.
- Extra gross profit per month ($)
- A money amount, starting at $1,400.
- Extra running cost per month ($)
- A money amount, starting at $220.
- Period to judge it over
- A number, between 0 and 240, starting at 36.
What the results tell you
| Result | What it is |
|---|---|
| Payback period | The headline result. A decimal figure. |
| Net gain per month | A money figure. |
| Net return over the period | A money figure. |
| Return on investment | A percentage. |
What is not in this number
Property figures here exclude the costs that decide whether a deal works: vacancy, maintenance, management, capital expenditure and the transaction costs at both ends. A return that looks strong before those frequently does not survive them.
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.