In our previous article in this series, we outlined how to get into the business of real estate photography. In this article, we are going to offer ten tips on how to set pricing and ensure that your business is profitable.
In upcoming articles, we will talk about the camera gear involved, how to capture and post produce real estate imagery, and more. However, we want to cover the subject of pricing first because it is critical to operating a successful business, yet it’s so often overlooked.
A big thank you to HDRsoft, creators of Photomatix, for sponsoring this education and helping our community of photographers.
Without any further ado, let’s dive in!
1) Charge by the property, room, or sq/ft – NOT hourly.
Real estate photography is a very different business from something like wedding or event photography, where “hours of coverage” are a common thing.
When it comes to real estate clients, they will want to feel like they’re getting their money’s worth. If your pricing is by the hour, yet your pace of work seems at all slow to them (even if you’re just taking the necessary time to get truly polished results!), some clients will feel like you’re milking them for more money.
Instead, first make sure that you always work with consistent efficiency, even if you have to take an extra few minutes to get a shot right. Then, once you know how many hours certain jobs will take, convert your desired hourly rate into a more straightforward price, and charge by the property and/or by the image. You’ll make roughly the same amount of money, and your clients will perceive the pricing to be much more straightforward and fair.
2) Do the math on what you’re actually paying yourself.
Alright, this tip is one that some creative people won’t want to hear, but it’s absolutely critical. So please don’t skip this just because the word “math” made the artist in you panic! Read on…
Tally up all the hours you spend not just shooting and post-producing, but also corresponding with a client, drafting up their contract, driving, even prepping your gear, cleaning your lenses, charging your batteries. It’s ALL part of your overhead time and costs!
If you can do this for all your work hours, and then organize it by job, you’ll discover that maybe for example it takes you 8-10 hours of behind-the-scenes work to deliver a job that “only” took 1-2 hours to shoot. Then, you can factor this info into your overall pricing for that size of a job to ensure that you’re profitable.
In accounting, this is called the “cost method” of pricing. Below is a sample screenshot of what this might look like.
Before we move on, another important bit of math to do is this: how many clients you can actually handle in a given day or week, and what that could add up to? This will be what actually tells you if the business model is truly profitable enough, or if you need to raise your prices. In other words, just because you turned a profit on one job, doesn’t mean you can go full-time and make a career out of it. The weekly/monthly numbers have to add up, too.
3) always seek improvement in Efficiency
Since revenue per client is typically in the hundreds and not the thousands, a profitable real estate photography business, perhaps more so than any other genre of photography, requires an efficient workflow.
Quick turnaround time and attention to detail can be the difference between a client who keeps using you, and one who never calls again. If you promise images in a certain time frame but can’t deliver on schedule, you’re in a lot worse trouble than if the subtle tones or colors of your post-production are slightly off.
Moreover, if you’re taking too long with any aspect of the workflow, you can quickly find yourself making significantly less per hour than you’d like.
Keep efficiency in mind and seek ways to cut time without compromising quality. For example, many real estate jobs can require you to perform the same bracketed HDR merge repeatedly, and the best way to do that is with an application such as Photomatix Pro.
4) Analyze The The Competition
To determine what you should charge, first you should understand where you are in relation to the market and your competitors. This can be done with a quick “SWOT” analysis, as outlined below:
- Strengths – Create a list of your strengths. What do you do better than your competition? Do you have resources or knowledge that your competitors don’t?
- Weaknesses – Next, make a list out all of your weaknesses. Where can you improve? What are your competitors doing better than you (currently)?
- Opportunities – List the opportunities in the current environment. Are there population or demographic changes in your area? Is there a shift in style preferences?
- Threats – List the external threats to your business in the current environment. Is there more competition? Are the barriers to entry low, possibly allowing more competition in the future?
After you’ve analyzed your own business, choose a handful of competitors in your area and make a list of their strengths and weaknesses. In addition, document their pricing if it’s available. Real Estate Photography businesses are often very transparent in their pricing. In fact, many photographers have their prices and packages right on their websites.
If you feel that you are offering a service, product, and experience at or above your competition, consider matching or pricing above them. If you feel like your weaknesses outweigh your strengths in comparison, consider pricing at below.
This is not an exact science, however, as each individual has different opportunity costs and income expectations. That being said, this analysis—along with the Cost Method outlined in Tip 2—give you an idea of the range in which you should fall.
5) Understand the psychology of pricing
This is another pricing 101 tip that every small business owner should understand. You should expect that most of your clients will go for one of your middle packages if you offer three main “packages” or products.
Your bottom package should be the minimum amount you would charge and still be motivated to complete the job and profitable after doing so. The top package should be the VIP experience with the potential to capture high-end clients with a high budget.
These packages should lead the client into booking the middle package, which should include everything your average client would want and need at a price point within your target market’s budgets.
While you shouldn’t expect every single client to jump at your highest-priced package, it isn’t a good sign if every single client is just barely affording your lowest package. (By the way, if every client is booking your most expensive package, that means you really should consider raising your prices!)
For many photographers, this can require a lot of fine-tuning in order to get it right, so don’t be afraid to adjust over time.
6) Know the value of properties in your target market
It would be great if the price of real estate photography could be an exact percentage of the value of the property itself, but unfortunately, that’s not the case. Still, it’s easy to understand that you can charge more for real estate photography in areas where the property itself is worth a lot more.
If you’ve been doing work in one area where all the properties are roughly in one price range, but you get contacted to shoot a property in a different area where most homes cost ten times as much, you should consider adjusting your prices for the new area. Of course, you don’t want to seem opportunistic, so your old pricing needs to be unknown to your new clients and/or you need to be able to justify the higher pricing if questioned.
This might result in a few “no thank you’s” from some potential clients, but it can eventually open the door to a whole new price bracket and clientele.
7) offer Additional Services
As any internet marketing guru will tell you, countless business models these days rely on selling additional services or products above the “in-the-door” price. Real estate photography is no different. Of course, no customer likes that “upsell” feeling, so make sure you are adding value with everything you offer. Also, keep it simple, quick, and low-pressure.
A few additional services that some real-estate photography clients might be interested in are:
- Ariel/Drone Photography – Whether this is an essential service or an add on these days is up for debate.
- Videography Services – Consider partnering with another business to offer this service if this is beyond your core skillset.
- Rush Turnaround Pricing – Even if most clients are OK with you delivering images in 48-72 hours, a few clients here and there may ask you to turnaround images in just 12-24 hours; you can either choose to swallow that cost (no shame in that, by the way) or offer such an immediate turn-around at an additional charge.
- On-Location Proofing/Delivery (Shooting Tethered, Etc.) – Quick turnaround is one thing; some high-end clients may even prefer that you proof the images on-site for them so that they can approve of each shot before you even leave the job. This may require you to shoot tethered to a laptop, and get the images into Lightroom or even do advanced processing immediately, all being services which are certainly worth an added fee.
- Different Shoots at Different Times of Day – Consider offering premium packages that offer photographs at different times of the day. Some clients may want a sunset/twilight shoot, while others may be fine with a mid-day job.
However, this idea deserves its own discussion, which we’ll begin below.
8) Remember – There’s Only One Sunset and Twilight Each Day
This may sound like a really odd thing to say among tips about pricing real estate photography, but hear me out. Simply put, exterior shots are gorgeous at twilight. And, unless you (and your client) are willing to wake up for sunrise, you’ll only be able to fit one property into a single day, usually.
So, some real estate photographers recommend charging a higher price if a client requests a twilight shot for their exterior, while other real estate photographers don’t. What works for you may be one or the other. If all your clients request that a property exterior is shot at sunset, you should just count it in your initial price. However, if more than half your clients don’t care if you photograph an exterior mid-day, then you have room to decide on what works best for your business.
The important thing to remember is that the “golden hour” and “blue hour” time of day does have value. Maybe you have to to do a lot of horrible rush-hour driving, just to shoot a property right around sunset, so you could consider having an added fee for travel and timing, even if it’s just a small fee.
9) Don’t sell yourself short or under-charge just to gain access to a property
This is one common mistake you might make after you’ve photographed a handful of properties, and you get an inquiry about photographing a really nice portfolio-worthy property. Don’t make the mistake of selling yourself short just to ensure that you get the job! Or, at the very least, don’t do this more than a few times in your career.
If you find yourself doing a cheap job or even a “freebie” just because you want to photograph a really nice property, then you may need a reality check. Simply put, if you’re a good enough photographer that a client is even considering letting you photograph a really high-end property, then you’re worth good money, and you should be charging it. Have confidence in your work and your value.
Charging a fee shows the client that, regardless of your skill level, your time is still valuable, and you should be respected as a fellow professional. To clients, shooting for free can bring with it the stigma that you are just a hobbyist who is desperate to make a few bucks sooner or later (and the client is happy with letting it be “later”).
10) be careful with volume discounts
For those of you who are just barely starting out, and are considering doing your first job for free or a low fee, be sure that you’re only offering this “introductory price” for one or two properties at most. However, avoid committing to multiple properties at a discount. Simply put, if you’re new to the business, you might vastly underestimate how much time it takes you to complete each project. This will only lead to major frustrations when you wind up making less than minimum wage, and also if the client doesn’t receive their photos in a timely manner.
If at all possible, only offer a volume discount to clients you’ve worked with already; you know their standards, or rather, how picky they are, as well as how much time goes into each job. Even then, a volume discount should be just a relatively small percentage. And remember, don’t even mention any sort of discounts, unless a client brings it up and persists in discussing it.
Bonus Tip! Set a business goal, and hold yourself to it
This final tip is the hardest for many entrepreneurial small business owners to tackle. That is, setting a specific goal and holding yourself to it.
Say, for example, you want your average job to be at $700 within 1 or 2 years, or you want to be grossing $80K per year, by the end of year 1 or 2. Well, how are you going to get there? It’s one thing to set a goal, but it’s an entirely different thing to come up with a plan, a course of action.
So, set small steps for yourself to take, each month or each quarter, with regards to your pricing, or your overhead costs and actual profits, or simply your sheer volume of clients. Work towards those smaller targets each week, each month, and see where you stand at the end of the week/month.
If you reach your goal early, you can either set a higher goal next, or you can accelerate your existing plan. However, if you don’t meet your goal, you guessed it – you need to reevaluate your strategy and potentially extend your timetable for the existing goal.
It can be really hard to hold yourself to these goals and adjust course accordingly, but any hard decision you make sooner, is much, much better than realizing you’re 6-12 months down the road and have almost nothing to show for it.
Again, this is just general business advice for all entrepreneurs, but it’s extremely relevant to the start of any photography business, and absolutely pertinent to this particular topic of setting your pricing as a real estate photographer.
questions or comments?
We hope this article has helped you find the confidence to move forward with a real estate photography business! Please leave comments below if you have any specific questions about pricing for real estate photography.