Is a 1300% return on your investment enough?

ROI Graphic

Anyone reading this article is involved in the real estate business in one way or another.  I’m confident the majority of our readers are Realtors™ or licensed real estate agents with a strong grasp of financial investment basics, like ROI. But you don’t need to be an investment or financial expert to understand that a 1300% return on your investment in anything is a huge return. There are very few products or services offering this kind of return, but the vast majority of real estate professionals have never done the calculation to decide if they should invest in professional photography for their listings.  Hey, the only other option besides hiring a professional is to take your own pictures and there are actual humor books and online articles dedicated to ‘Terrible Real Estate Photos’ taken by real estate agents!  The vast majority of agents are great investment advisers but they’re not know for their photography skills.

Seriously, all agents putting a listing on the market are about to become a trusted financial adviser for the biggest transaction of most people’s lives; but sometimes balk when it comes to investing as little as $129 in professional listing photography. I feel so strongly about the amazing value gained by our services I just had to do the math and calculate the average return on the investment in our professional photography services.

First, let’s make some fair assumptions for our example calculation:

  1. You’re listing a $350,000 home (a pretty average price in this market)
  2. The seller agrees to pay a 6% sales commission
  3. You’re going to pay a 2.8% coop buyers agent commission
  4. You’ve got an 80/20 commission split with your brokerage
  5. The average investment in professional real estate photography is $160
  6. Professional photography contributes 25% toward the sale of your listing (I actually think this percentage is low since pictures are so vital to the sale)

Using these assumptions and entering the results into this simple formula delivers our final ROI results below:

  • Your total commission = $8960
  • Your gain from your investment in pro photos = $2240 (25% of $8960)
  • Your investment cost = $160

ROIFormula

Your return from the sale of the first listing = 1300%.  That’s a pretty amazing return, right?  Well the returns don’t end once you sell the listing you had photographed!  Seriously, your online tour and professional photography for this one listing will continue returning on your investment for MANY years after you sell this listing!

Think about it, how often will you use your gorgeous listing photography in future listing presentations?  Think of the neighbors, friends and family of the sellers who all want to see pictures of your sellers home.  How about all the views by friends and family of the buyers who purchased your listing?  Don’t underestimate the possible new business you generate from buyers who weren’t your client.  They and their sphere of influence are also possible future clients.  How about online shoppers who view your listing photos and call because they were so impressed with how you represent listings online?  The returns from your one $160 investment could amount to thousands of dollars over a three to five year period.

So, when you’re trying to decide if you should hire a professional or take your own pictures, I hope this little formula for calculating your return comes to mind, you give Mediamax a call and have one of our talented photographers capture stunning pictures of your listing!

What are your thoughts about the return gained from professional listing photography?  I’d love to see your comments and read about your success stories winning new business from professional real estate photography.


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