How to Set an Apartment Marketing Budget

Every budget season, property managers and regional managers face the same question: how much should this property spend on marketing, and where should it go?

There’s no single right number. A new building in lease-up needs far more than a full, stabilized property with a waiting list. But there are common ways to size a budget, and a simple process for deciding where it goes.

Three common ways to size the budget

1. A percentage of gross potential rent

Many operators set marketing as a percentage of gross potential rent (GPR), the rent the property would collect if every unit were leased at market rate. Agency guides often cite a range of about 3% to 6% of GPR for marketing, with lease-ups at the higher end.

This method scales with the size and rent level of the property. Treat published ranges as a starting point, not a rule: they vary by source and are rarely based on published studies.

2. A cost per unit

Some companies budget a set amount per unit per month or year, adjusted by property type and market. It’s simple to apply across a portfolio and easy to compare between properties.

3. Work back from the leases you need

This method ties the budget to results:

1. How many leases do you need? Count expected move-outs from lease expirations and your typical renewal rate, plus any units you need to fill to reach your occupancy target.
2. What does a lease cost from each source? Use last year’s cost per lease by source. (See Cost Per Lease: Measuring Which Apartment Marketing Actually Works.)
3. Multiply. Leases needed × cost per lease = the budget you need, before adding fixed costs like the website.

This is the most work, but it gives you a budget you can defend, because every dollar connects to a lease.

Many operators use one of the first two methods for a starting number, then check it against the third.

Fixed costs vs. flexible spending

Split the budget into two parts.

Fixed costs are what the property pays no matter what:

• Website hosting and maintenance
• Listing site subscriptions you keep year-round
• Software for leads, tours and reviews
• Permanent signage and its upkeep

Flexible spending is what you can turn up or down:

• Paid search and social ads
• Specials and concessions
• Events
• Seasonal entrance displays and banners
• Extra listing site placements during slow periods

Knowing which is which makes it easier to cut or add quickly when occupancy changes.

Where the money usually goes

Most apartment marketing budgets cover some mix of:

• Website and search: the property website, search engine optimization and Google Business Profile
• Listing sites: the internet listing services renters browse
• Paid digital ads: search ads and social media ads
• Reputation: review management and responses
• Resident retention and referrals: renewal incentives, resident events and referral rewards
• Curb appeal and on-site marketing: signage, entrance displays, banners and model units
• Events: open houses, grand openings and community events

Curb appeal is easy to under-budget because it doesn’t show up in an online report. But drive-by prospects are a real lead source, and a tired entrance hurts every other channel. (See How Apartment Communities Can Turn Drive-By Traffic Into Leasing Leads.)

Adjust for the property’s situation

Lease-up: Spend more, and spend early. Pre-leasing, signs at the site, a strong entrance and events all matter before and right after opening. (See Lease-Up Marketing for New Apartment Communities.)

Stabilized and full: Shift toward retention, reviews and referrals. Keeping a resident usually costs less than finding a new one.

Below target occupancy: Add flexible spending where your cost per lease is lowest, and check pricing and follow-up speed before adding more ads.

Seasonal swings: Plan more spending ahead of spring and summer leasing season and less in slow months. (See Leasing Season Playbook.)

Budgeting across a portfolio

If you manage several properties:

• Use one budget template so every property’s budget is built the same way.
• Buy shared items centrally, such as signs, displays and software, for better pricing. (See How to Buy Marketing Supplies for 10, 50 or 100 Properties.)
• Keep a flexible pool at the regional level to move to properties that fall behind.
• Compare cost per lease across properties to see where money works best.

Review it during the year

A budget set in the fall is a guess about the next year. Review it each quarter:

• Compare leases and cost per lease by source to the plan.
• Move money from channels that aren’t producing leases to ones that are.
• Adjust for occupancy changes, new competition and seasonality.

The bottom line

Start with a percentage of gross potential rent or a cost per unit to get a number, then check it against the leases you need and what each lease costs from each source. Separate fixed costs from flexible spending, adjust for the property’s situation, and review the budget every quarter.

Sources

• Brindle Digital, “Apartment Marketing Budget Guide”

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