TourBuzz Virtual Tour Community

How Much Should I Charge For Real Estate Photography (Part 2)

How Much Should I Charge For Real Estate Photography (Part 2)...

How much should you charge for real estate photography? As much as you can! In my previous article, Part 1 of this topic, I outlined the most important considerations in answering the question of how much to charge. If you haven’t read Part 1, then this part won’t do you much good - so please go back and read it first. I’ll wait.

Ok. Now that you’ve read Part 1, you saw that at the end of the article I said I’d do a breakdown of an example photo package. My goal here is simply to illustrate two things: 1. The value of the service you provide and 2. The cost of providing that service sustainably. One thing this is NOT is a “catch all”. Your operating expenses, competition, expertise, income requirements etc will vary. If you’re working a full-time job and are just trying to make some spending money, this won’t apply. However, if you’re trying to make a full-time legitimate business, this should give you some pretty solid ballpark numbers.

Let’s say you’re charging $99 for a photography and virtual tour package. For this illustration we’ll assume the following:
1. This is not an isolated order. For this example we’ll say you’re averaging 10 packages per month right now.
2. You’re operating as a licensed and insured business.
3. You’re using Tourbuzz.

It’s 10:52am on a Tuesday morning when your business line rings. On the other end is a new client who saw your ad on Google and wants to give you a try. They’ve used some other company before - a national chain, but they weren’t happy with the photos or the service. You fill out an order sheet, take the down payment over the phone and get them on the calendar for Thursday at 8am.

On Thursday at 8am it’s raining and the homeowner has a sick kid so they cancel with you and re-schedule for Monday at 8am. Sunday night you make sure all your gear is charged up and your memory cards are clear. You jump in your vehicle, stop by the gas station to fill up for the 50 mile round-trip jaunt to the property and grab a Starbucks on the way. After a successful photo shoot you return to your home office and start processing the photos on your computer. While you’re processing the phone rings at it’s a client who needs help uploading photos to the MLS and has questions about whether or not they are a Realtor.com Showcase member. After 15 minutes on the phone providing some stellar customer service you go back to processing your images. *Ring*....

This time it’s a new client you photographed for last week. They’re not mad but they’re just not quite happy with the photos you took. Most of them are ok, but you missed the shot of the kitchen they were hoping for. To keep them happy you offer them a credit on their account and offer to go back and re-shoot the kitchen. You’re about to get back to processing the images when you realize you’re almost running late for a networking meeting with the local board of REALTORS.

The scenario I just painted is as realistic as I could make it - in fact it happened like that to me a few weeks ago. The following numbers will not be all inclusive, but are realistic.

1. Phone line. $60/mo. Divided by 10 (remember we’re averaging 10 jobs per month?) = $6.
2. Advertising (Google Adwords, Yellow Pages, Printed Material etc.) $200 per month/10 = $20.
3. Office supplies and utilities (even if just a share of your home utilities) $30 per month/10 = $3.
4. Credit card processing (optional but recommended) 2% = $2
5. Fuel for the 25 mile trip (both ways). 25mpg, $3.00 gal = $6
6. Insurance (vehicle and business liability) $50 per month/10 = $5
7. Tourbuzz tour = $12
8. Professional memberships (REALTOR associations, chamber) $50 per month/10 = $5

Total revenue for this job: $99
Total expenses as listed above for this job: $59
Income: $41

So, let’s take this $41 and break it down by the time you spent on this job.

15 minutes on the phone and taking the order.
10 minutes on rescheduling and confirming the appointment.
1 hour driving to and from the appointment.
30 minutes to an hour photographing the property.
1 hour offloading the images, processing them and getting the tour online.
15 minutes dealing with the client after the job (help with order, Realtor.com posting etc.)
15 minutes for invoicing, paperwork, follow-up.

Total: 3 hours and 25 minutes (3.5 hours) = $11.71/hr

Hopefully this has shed a little bit of light on where the money goes and what to charge for real estate photography. Of course you can save on some expenses but will have more in other areas. We haven’t even added employees and counted their wages, workers comp insurance, payroll etc. Your situation will dictate what YOU need to charge to be competitive, earn the living you need to earn and to sustain the business through growth and adding employees.

In the scenario above, if you feel you need to make more to make your business worthwhile, you have a couple of choices. First, you can charge more. Oh the can of worms this opens. :) But, if your work is better than average and if you’re offering more value - you should be charging more in this author’s opinion. Second, you can do more volume which will bring many of your fixed cost expenses down on a per-job basis. Some expenses will climb - you probably will have to be advertising more, for example, in order to do more volume, but overall you’ll be operating leaner with more volume.

The bottom line is that it’s going to all boil down to differentiation. What makes you different from your competitors and why should the client pay for your services instead of theirs? The answers to these questions can only come through taking the first steps and doing that business plan we talked about in Part 1.

A friend of mine, Darrel Klassen, has the following signature line for his blog and forum posts: “Amateurs worry about equipment. Professionals worry about money. Masters worry about light.” I love that quote! Let’s all strive to be masters, but never forget that a business owner we are professionals!

Tim Ray
Vantage Point Imagery, LLC
http://www.vantagepointimagery.com
Colorado Virtual Tours
http://www.ColoradoVirtualTours.com

Comment by Hamish Tear on December 24, 2011 at 6:09pm: This is an excellent 'business' article. I have not sold a tour in over a year and am not even trying. I believe that many TB photographers are charging about $100 - even some very good ones. As a previous business-owner I have long-since realized that, unless you operate a business with multiple photographers - like Tim - you're not going to make it. Even in Jackson Hole, with the top 3% of real estate prices in the country, Realtors use their i-phones or pocket cameras, upload to their own tour providers and blast it to the internet in the same ways that TB does. Additionally, Realtors just now have the time to do this on their own because sales are slow. Equally - they don't have any extra cash to spend on me. But the real truth is that none use conventional 'Virtual Tours' any more anyway. They are considered to be annoying and not worth all the bells and whistles over simple, still photographs. On the other hand, I do sometimes show up at a house with my lighting etc and charge $1,200 / day. The home owner usually pays for this. Architects and interior designers are a much better market than realtors. I have also diversified into other areas - portraits, journalism, travel (see www.ScotlandPhotoWorkshops.com) That's just my take on my specific area - but realtors are savvy people. They know they can get cheap VT's done by those entering the photography market - and there are plenty of them. So if they DO want a VT (haven't seen one around here in a long time) they can get it for $100 - and they don't really care about the quality as it seems like any photo will do - the client can see the house once they get there. About two years ago when I started with TB I sent in a couple of warnings about pricing VT's at $100 (a common price to be charging) - this industry needs to step it up.

Comment by Shelby Green on December 27, 2011 at 12:01am: Tim - Thanks for the great article. I know you were trying to keep it simple, but one thing you left out is the wear and tear on the vehicle the photographer drives around. Not only is there the cost of the fuel that you put into your cost analysis, but one is also putting miles on a vehicle. You need extra oil changes, break pads, CV joints, tune ups. These costs are directly related to all the driving you do and they have to be paid for out of something. So one is really getting much less than $11.71 if all the photographer is charging is $99. Smart people don't wear out their vehicle and work for less that it takes them to do the job.....

Here is something to think about:

The $100 price got started 8 or 9 years ago when virtual tours were in a tiny low quality viewer not in a high quality viewer like the one Tourbuzz offers today. Nine years ago all you needed was a cheap camera that cost $250 for the low res photos. One did not need to take as much time with the photos so it took less to produce photos and a tour. Gas was $1.30/gallon at that time and food cost a lot less. The shop rate at your local garage has gone up in the last 10 years. So have all the parts to repair your vehicle.Your mechanic and the Realtor's mechanic are being fairly compensated for their time. So should you be.

Anyone following this blog must already know that 90% of buyers start their home search on line. If a Realtor is serious about selling something (many of them are not) rather than whining about how bad things are - they need a good online presentation. Your job is to make them aware of that. Your service has value (or you should do something else)

Your price should not be what someone was charging 10 years ago for something that cost less to produce at that time and was of much lower quality to begin with, at a time when it cost less to live....I think these are some things to keep in mind in establishing a price and in dealing with Realtors.

@ Hamish

Comment by TourBuzz Support on December 27, 2011 at 11:54am: Great points, Shelby. It's definitely a complex business!

We are working hard on adding additional features that you can upsell to help improve your revenue per tour and make your business more profitable.

Comment by Chad Jones on December 29, 2011 at 1:09pm: Great article. Seeing it drilled down like that helps!

I charged $90 for just stills for 2011 and to get the tourbuzz product I charge an additional $50. So for tour and photos I was at $140. For 2012 I am raising my still photo price to $110 and keeping the tour at the $50.
I have also been getting requests for the video export feature more and more with the new call to action on the client panel. I charge $50 for this service and the price has not had any objections for what the video produces.
I hope to be above $150 for stills in my area in the coming years as my business grows. YoY I had a 9% increase in sales over 2010. I expect to do about the same this year, maybe more with some of the great features I can monetize coming out from Tourbuzz.

Chad

Comment by TourBuzz Support on December 29, 2011 at 2:32pm: Wow Chad, that's great! We love to hear that we've been able to help you boost sales with little effort!

How Much Should I Charge For Real Estate Photography (Part 2)

You need to be a member of TourBuzzVT to add comments!