Internet Listing Services (ILS) like Apartments.com, Zillow, ForRent.com and others are, to many property management companies, essential for highlighting their apartment communities—especially ones with lesser units or budget limitations that prevent them from investing in a website.
The problem is that in our years of operating as an apartment marketing company, we just haven't seen any of those websites provide a justifiable return on their investment. The only achievable way to gain the visibility needed to generate a sufficient amount of leads from an ILS requires apartment communities to pay thousands of dollars annually for top-tier 'premium' packages.
In the multifamily industry's continuous debate over whether using an ILS or Pay-Per-Click advertising is better, RentVision would best be considered as ILS 'agnostic'. While we firmly believe that a targeted, dynamic digital advertising strategy that directs prospective residents towards an engaging website that lets them see the inside of units is the better and more cost-effective approach, we're still advising our clients who use an ILS to keep it only when it's working. When it's not, an ILS should be one of the first sources to cut because that could free up a major portion of their marketing budget.
Here's three reasons why apartment communities should stop spending so much on ILSs:
Reason No. 1: At the end of the day, it's about performance and driving leases. The ILS model makes this unnecessarily harder to accomplish.
In general, ILSs perform fairly well in delivering more leads for your apartments. But to determine their effectiveness, you should count leases, not leads. That's because most leads generated from an ILS aren't highly qualified.
For one, many of them come through via email rather than a phone call to your leasing office. Some email leads could be prospects asking questions about the pet policy or pricing when they should've been able to gather that information from the listing itself. The minutiae of following-up via email (or other messaging platforms) with prospects significantly slows down the leasing process and your ability to improve occupancy.
That's why owning a website that lets prospects tour your units whenever they want with a walkthrough video tour, and initiate communication with one of your leasing agents via conveniently-placed 'Click-To-Call' or 'Request An Appointment' links, generates better qualified leads that convert faster than the ones acquired through an ILS. You can train your leasing agents to create urgency and schedule a tour within a phone conversation that lasts only a few minutes rather than a long email chain. Here's how:
Second, any ILS listing places your apartments in direct comparison with competitor properties. The only possible way to achieve higher visibility (or 'stand out' in this case) is by increasing your package.
This gets to the core of why apartment communities should stop spending thousands on ILSs: you have to pay more just to have a chance at seeing your desired return. This may be reflected in your Cost Per Lease measurement, which should be weighed considerably when measuring the effectiveness of your ILS listings.
If you're not paying for an ILS's top-tier package, your apartments will begin to blur with everyone else's in the eyes of prospective residents. Now you must have some significant or visual differentiator that makes your apartments more appealing than the others being featured right next to them. This may mean taking the overly drastic measure of lowering rent just to be competitive.
On a positive note, ILSs may be a worthy expense if you're in a community lease-up. After all, you'll have a huge amount of units going live at the same time and you need them to get occupied as quickly as possible or else you'll accrue significant amounts of lost rent. That's why spending more on marketing in general during a lease-up is a smart tactic because you're guaranteed to see a higher return on investment.
Reason No. 2: ILSs lock you into terms, costing you money even when your occupancy is stable.
When you're thirsty and need a glass of water, you turn off your water faucet once your glass is filled, right? Of course you do.
Well, using an ILS is the same as if you turned on your water faucet to fill your glass and then left it on. For a year. Think about that.
This is why digital ads are a far superior option to ILSs because they allow you to become dynamic, meaning you can dial back your ad spend whenever you want and save money.
You will lose a lot of money if your reaction to a vacancy problem is to upgrade your ILS package. When your occupancy stabilizes, you'll still be paying the same price as you did when you were in desperate need for leads for however long of terms you agreed to, which could be months.
Reason No. 3: ILSs steal traffic away from your website by buying Google Ads on your apartment name.
This is one of the hidden costs behind using an ILS. One of the features of a top-tier ILS package are Google Ad campaigns which, on the surface, may seem like a worthwhile expense.
The problem, however, is that the ILS purchases ads for the keywords in your community's name, so that when a prospective resident who searches for you by name the link to the ILS is listed ahead of the link to your website. You're essentially paying to have someone steal qualified traffic away from you, and worse, direct it to a platform featuring all the other communities in your immediate area.
The only way to regain that needed traffic is by running defensive campaigns in Google yourself. Purchasing both ILS listings and digital ads becomes counterintuitive and wasteful for communities, though, because the result will be lower click-through rates and high costs-per-click for the community's own ads.