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Niche refers to a specific group of people with common traits and interests. With real estate, there are many lucrative niches that work in different ways but all share the same goal: increasing one’s financial portfolio.
The “real estate niche quiz” is a list of 10 real estate niches and why they work. The list includes the “residential land”, “commercial property”, “multifamily units”, “single family homes”,”condominiums”,”apartment buildings”,”land development”,”rental properties”,”investments in commercial property”,”investments in multifamily units”.
Setting up a real estate specialization is a smart approach for agents to concentrate their efforts and time in order to increase transaction flow. For example, you may create a real estate specialization based on geography, property kinds, or customers. Make your specialization the emphasis of your marketing after you’ve decided on one—clients are more inclined to work with someone who they see as an expert in their real estate search. Here are ten profitable real estate niches to consider if you’ve developed a plan, optimized your time, and established yourself as an expert.
1. Geographical location
The most frequent kind of real estate specialty is location-based real estate, which is focused on a certain area, city, ZIP code, or county. To optimize their lead generating potential in the area where they are most skilled, real estate brokers often position themselves as experts in a certain location. Clients will be more trusting of your worth if you demonstrate your understanding of the area market.
Furthermore, the location you choose allows you to optimize showings and appointments while avoiding wasted time going back and forth. Your specialized locale should be one with which you are most acquainted or have done substantial study. In an ideal world, you will also reside near to the area you choose.
Use a firm like Offrs to earn expert status inside a ZIP code after you’ve found a solid area for your real estate expertise (s). Listing leads are provided by the Offrs platform to assist you in obtaining listings in your preferred location. As you acquire more real estate listings in a certain area, you position yourself as the go-to person for prospective buyers and sellers who see your contact information on yard signs, advertising, and online listings on a regular basis.
Offrs may be found on the internet.
2. Type of Property
Different property kinds may be chosen as a real estate specialization, allowing agents to position themselves as experts in the structure, procedure, and features of that particular property type. You might select from a variety of property kinds for your real estate specialization, such as:
- Single-family houses are self-contained residential structures that are situated on their own plot of land.
- Multi-family housing is a single structure with numerous apartments for multiple families living independently.
- Condominium (condominium): A privately owned residential unit in a complex of similar apartments.
- Co-ops: A sort of property held by a company made up of the co-owners, op’s co-ops are unique to New York.
- Business real estate includes office buildings, warehouses, and retail structures that are utilized for commercial reasons.
- Historic residences are those that are more than 50 years old that are linked to a historical event, person, or style, or that give other forms of historical knowledge.
To discover how many various property kinds are available within your selected ZIP, city, or neighborhood, use Zillow to search for listings. Choose a category with enough inventory to be viable while also complementing your main emphasis.
A commercial property sale and a residential property sale, for example, have significantly distinct processes. They have various documentation requirements and application procedures. If you live in a city, you’ll probably be able to complete more transactions in bigger multi-family complexes with condominiums and co-ops than you would with the selling of historic houses.
In 2020, the following are the types of residences that will be acquired in the United States (Source: Statista)
In 2020, a substantial number of single-family detached houses were acquired in the United States, as compared to apartments, townhomes, and condominiums, as seen in the graph above. This was perhaps attributed to the pandemic of 2020. With so many more individuals working from home, they looked for greater space, less densely populated places, cheaper cost of living, and less constraint from lockdown.
According to MyMove.com, over 111,000 New York City residents migrated away in 2020, compared to approximately 19,000 in 2019. Knowing these facts for your desired region will aid you in determining which property type is appropriate for your particular real estate specialty.
3. Different Buyer Types
Buyers are on one side of the real estate transaction and might be a segmented target market or a specialty target market as a group. Buyer personas should be created by agents targeting buyers since they will have to source the unique sorts of houses or properties that different purchasers will be searching for. Understanding the demands of different buyer types will also influence your lead generation and conversion strategy.
The following are examples of buyer-side customer types:
- Buyers aiming to purchase their first house, generally on the basis of affordability. In 2020, this group accounted for 33% of all homebuyers.
- Buyers of high-end goods: These are people with a lot of money, and many of them already have a lot of stuff. They may spend time in each place throughout the year by acquiring numerous properties.
- Investors: Because they specialize in purchasing and selling real estate, investors are typically highly reactive and attentive, as well as very knowledgeable. Unlike homebuyers searching for a dream house or a place to raise a family, investors look for homes that have the potential to increase in value fast and then sell for a profit.
- Commercial/retail purchasers: Commercial property buyers are often business owners (or their agents) searching for office space.
- Rent-to-own: A rent-to-own buyer is not yet ready to purchase a home. They may lack the financial resources to make a down payment or have a low credit score, limiting their ability to get a mortgage. However, rather than merely renting a house without generating equity, they wish to invest in a property with the objective of owning it.
Working with investors as a real estate niche: Here’s an expert tip:
Bruce Ailion, Realtor & Attorney, RE/MAXTown & Country
“Investors is one of the niches in which I work. Advertising, word-of-mouth, and research are how I locate them. I am not an emotional, touchy-feely agent, therefore this is a natural market for me. Investors like a straightforward, bottom-line-focused approach—no nonsense, just the facts—which suits my mentality. In addition, I have extensive expertise and training in this field. The analytical abilities that investors desire may be shown by having a master’s degree in real estate and being a qualified attorney. I’ve been an investor for almost 40 years and own a management firm with a track record of property management and the ability to handle an investor’s properties. It’s a perfect match.”
Being a buyer’s agent may be incredibly lucrative—88 percent of purchasers say they used an agency to find and purchase their house. Once you start working with buyers, you can either target this niche for repeat business or collect evaluations and testimonials that speak to your value as a buyer’s agent to drive referral business from your circle of influence or previous customers.
What if I told you that In 2020, 41% of sellers who hired a real estate agent were suggested by friends or family, and 26% were repeat customers who utilized the same agent they had previously dealt with. (Photo courtesy of the National Association of Realtors)
If you’re just getting started in real estate and don’t have a lot of repeat or referral business, the BoldLeads platform can help you develop your company by offering buyer leads and a customer relationship management (CRM) tool to help you remain in touch with your leads. You may automate email, text, or voice broadcasts with various categories of purchasers using their customisable funnels to engage and nurture them as customers.
Visit BoldLeads.com for more information.
4. Different Types of Sellers
Your real estate specialization might concentrate on representing sellers, which is the polar opposite of being a buyer’s agent. Sellers come in a variety of shapes and sizes, but they are all existing real estate owners trying to sell or rent their homes.
Here are some of the many sorts of categories where you may locate real estate sellers:
- Landlords and multi-family building owners: Landlords and multi-family building owners are seeking for an agent to represent their rental property.
- Home-flippers are people who buy run-down houses with the intention of renovating them and reselling them for a profit.
- Investors who acquire single-family houses to utilize as rental properties, which are generally managed by agents.
- A seller who attempts to sell their home without the assistance of a real estate agent is known as a for sale by owner (FSBO). Many FSBO sellers discover that the procedure is more difficult and time-consuming than they anticipated, and that they may benefit from the help of a real estate professional after all.
- A life event has happened, such as a marriage, birth, divorce, rise or reduction in income, or death, necessitating the need to sell in order to relocate (to a bigger or smaller property) or discharge assets.
- Homeowners that are waiting to list their home due to the present market conditions are referred to as “sidelined sellers.”
According to statistics, a real estate agent aided 89 percent of sales, but creating seller leads might be challenging for the inexperienced. Building a referral network by calling past customers and asking if they know anybody who is wanting to sell might, on the other hand, improve your chances. Also, using social media to demonstrate your experience in house valuation reports, new home marketing techniques, and negotiating abilities throughout the offer process may help you grow your brand as a seller’s agent.
FSBO listings may potentially link you with a seller who has tried and failed to sell their home on their own. Finding FSBO listings may be difficult since some sellers are averse to cooperating with an agency. In this post with six methods for generating leads from FSBO customers, you’ll learn how to locate and succeed with FSBO listings.
SmartZip, for example, connects agents with suitable sellers. SmartZip farms for homeowners who are most likely to sell using predictive analytics. You may create real estate landing pages using their tools to give house valuations and comparative market analysis to drive seller leads.
Go to SmartZip.com.
5. Contextual
Situational transactions occur outside of the usual real estate transactions of buying or selling a home, and they may be a targeted specialty for certain brokers. The following are examples of situational transactions:
- Short-term/vacation rentals are fully furnished rentals that are offered for a limited time.
- Short sales are real estate transactions in which the property is sold for less than the amount owed on the mortgage (usually requires lender approval)
- Green/eco-friendly: A house that was planned and constructed using ecologically friendly materials and equipment, as well as renewable energy sources.
- A person who is transferring or being moved by a firm or business for which they work.
Each particular transaction has its own set of steps to follow in order to conclude the sale, and the commission structure differs as well. These are excellent additional deals that may be used in conjunction with typical real estate transactions, and many of them are highly profitable. Relocation specialty specialists, for example, may make up to $90,015 per year.
Here’s a solid tip for finding a niche in situational real estate:
Lindsborg Vacation Rentals’ owner, Jim Prugh
“A few years ago, I came upon a little town in central Kansas with a population of roughly 3,500 people. After repairing a few properties in the downtown area, I began offering holiday rentals. I was often contacted by people on short-term projects, some as short as a month and others as long as a year. They didn’t want to remain in a hotel for many months, so they were seeking for a less expensive option.
“I concluded there was a demand for this section of real estate development after receiving a few dozen queries.” My first corporate housing project (also known as a “executive stay”) paved the way for a second and eventually a third. The third property includes five bedrooms and may be used as corporate co-housing, which is popular in San Francisco and New York.”
Getting customers in a situational niche will need innovative marketing aimed at a certain demographic. Even if you don’t have a huge marketing staff or budget, PostcardMania can help you reach out to certain customer groups using direct mail. They provide customisable templates for creating mailers, as well as matching them to advertising on Google, Facebook, and Instagram for online lead outreach.
Go to PostcardMania.com.
6. REO & Foreclosures
Real estate owned (REO) and foreclosure listings are properties that have a lender engaged. REO listings are homes that have already been taken over by the bank due to a failed sale, while foreclosure listings are properties that have been taken over by the lender and are being sold to reclaim the sum owing. It might be difficult to get into this industry, but if you can get listings inside the specialty, it can be rewarding.
In order to have meaningful talks with lenders regarding property worth in the REO and foreclosure sector, an agent must first grasp the real estate market and trends. To get started, it’s advantageous if your brokerage specializes in these properties or if you can join an existing team. Foreclosure specialist agents will have a consistent flow of business if they have established working ties with lenders and asset managers, as well as the correct marketing plan in place.
Purchase foreclosure leads from a site like REDX if you want to get started straight away. REDX locates pre-foreclosure properties and gives you with contact information for the troubled owners. They also offer a robust CRM that organizes and records your contacts, ensuring that you stay in touch with all potential customers.
Go to the REDX website.
Rental Properties No. 7
The cost of acquiring property in highly populated urban regions is considerable when compared to the median income. This implies that people who live in cities are more likely to rent rather than own a property. Agents may undertake several showings and enhance their closing volume by focusing on rental homes in metropolitan areas as a real estate speciality.
The following are some examples of rental property real estate specialized opportunities:
- Individual rooms are rented rather than the complete property.
- Off-campus accommodation may be more cheap than on-campus living for students.
- Full-service apartments are luxury high-rise flats with doormen, gyms, laundry, and public meeting places, among other amenities.
- Multi-family apartments: A building devoted only to the renting of individual dwelling units.
- Individual houses acquired or constructed on a freestanding property for people or families to rent; they were typically once main residences for the owners who now desire to generate equity by renting instead of selling.
The Zillow consumer housing trends study for 2021 analyzes housing market problems that are keeping rental prices high. Interest rates are now at all-time lows, increasing customer desire and capacity to purchase a property. However, since availability is limited and demand is strong, property prices are being pushed higher, and many buyers are receiving several offers, resulting in the majority of bids being rejected.
It’s a chance for a dedicated rental agent to assist individuals who may be willing to rent in the meantime and wait out the market before attempting to purchase again as an agent assisting clients navigate this present housing market. To create more leads, you may also exercise prospecting.
Here’s how to make rental houses your real estate specialty:
Silicon Valley Property Management Group’s Principal, David Roberson, Esq.
“On the San Francisco Peninsula, Silicon Valley Property Management Group (SVPMG) handles approximately 150 client properties.” For numerous reasons, we concentrate on higher-end single-family homes (SFRs). In comparison to a multi-unit property or an apartment complex, SFRs are usually simpler to prepare and manage. Better-end rentals tend to attract tenants with a higher socioeconomic position, which means we have less issues with rent payments, property complaints, and general cooperation with the renting situation. Finally, higher-end SFRs are simpler to rent since they often have strong curb appeal, are located in higher-end communities, and are overall appealing prospects for renters seeking a suburban home. The intersection of these factors forms the foundation for our company approach.”
What if I told you that Purpose-built single-family rental (SFR) apartments accounted for 4.5 percent of single-family development, according to Arbor.
Hospitality is number eight.
A hospitality facility is a real estate development featuring individual rooms for short-term accommodation, generally a hotel or motel. The seller and investor sides of business transactions are the core of the hospitality specialty.
In addition to being distinct operational firms, hotels are real estate investments. Within the hotel industry, there are three types of properties: luxury, mid-scale, and economical. Unlike other real estate deals, this one involves long-term projects with greater commissions owing to the increased value of the real estate holdings involved. With higher rewards, agents may concentrate on only one contract at a time.
When selling a hotel, a significant degree of skill and effort is necessary. It’s a time-consuming procedure that requires an agent or team to assess a hotel’s physical condition, make modifications to raise value, and grasp financial data to assist speed up the conclusion of these large-scale transactions.
Agents that specialize in hospitality real estate often represent either a hospitality owner or firm wishing to sell a property or a high-net-worth person trying to diversify their holdings. A hotel owner might sell assets to a real estate investment trust (REIT), which are businesses that possess income-producing properties, in addition to selling outright.
Communities (nine)
Both buyers and sellers may be interested in different areas that suit their needs. Golf courses, pools, leisure centers, and tennis courts are all available in the communities. These extras, on the other hand, usually come at a larger cost.
The following are two areas where agents might find real estate specialized opportunities:
- Residential estates with carefully regulated access are known as gated communities.
- Retirement communities: Provide an environment for older persons, generally aged 55 and over, to live an interesting and active lifestyle.
Both kinds of communities provide homeowners a greater feeling of safety and security. Due to investments and regulations imposed by the homeowner’s organization, there is an impression that the houses are well kept (HOA). In these communities, there is a higher perceived level of quality and exclusivity.
The advantage of this real estate specialty is that transactions in these towns often command greater sales prices than transactions in other communities. Clients intending to buy in these locations are used to receiving high-quality service and have extensive networks and connections. Agents that effectively construct a referral network of local buyers and sellers generate a steady stream of leads for their company.
Outside Amenities (10)
You may be able to specialize on homes with unique land or outside features that appeal to a specific sort of customer, depending on your area. The following items may be requested by these buyers:
- Homes on the water’s edge or near to a lake are known as lakefront property.
- Property on the ocean or beachfront: A property on the coast that is either directly on the beach or offers ocean views.
- Homes erected in a mountainous terrain are known as mountain homes.
- Farmhouse: A residence built on a large piece of land with the intention of concentrating on agriculture.
The sorts of properties listed above are not available in every market. However, if you can specialize on one of these niche areas, you may establish yourself as an expert, particularly because property prices for these features are often higher. You’ll need to know key details such property taxes, insurance needs, prospective land leases, and property boundary locations to assist the buyer in the transaction.
Representing buyers and sellers in these sorts of transactions also entails representing the lifestyle that these properties are associated with. It also necessitates knowledge of topics such as lake and beach management, watershed runoff, aquatic vegetation, irrigation, additional structures such as barns and processing facilities (or the ability to construct them), power and water systems (such as for remote mountain homes), water quality, and other factors unique to the area or amenity.
Check out this expert advice on how to make waterfront properties your real estate specialty:
The Close’s Christopher Linsell is a staff writer.
“Targeting your message to a specific audience is a terrific strategy to establish oneself as an authority in your field. Start researching deeper into more nuanced regional niches to see what sets these homeowners distinct from others if you want to gain a leg up on your competitors.
“For example, not all lakes are created equal in the realm of waterfront properties. Some people may own a property on a single lake because it is the best fishing site in the state. Others may choose for a different lake since it is ideal for water skiing and jet skiing. These decisions don’t simply reflect a person’s lifestyle; they also reflect how they spend their time, money, and attention.”
Why is it critical to identify your real estate niche?
Success fosters success, as the adage goes. Clients who notice that you’ve completed several transactions in a certain niche via your marketing or online listing platforms are more inclined to choose you as their agent since they’ve witnessed your real estate success in that area.
Many times, when an agent is just starting out, a speciality emerges based on their early agreements. In other words, your previous transactions may disclose a pattern that indicates your skill in a certain location or property type. Some agents, on the other hand, choose to promote or pitch for houses with a higher selling price in order to maximize their compensation. Other agents locate untapped niche markets in their region and concentrate their marketing efforts on them.
Conclusion
Because there are dozens of distinct real estate options, no one can be a jack of all trades, thus identifying your real estate expertise is critical to a successful real estate career. Expert advise shows that a real estate specialization may coincide with a person’s own hobbies, allowing you to stand out from the competitors while still enjoying each transaction. This helps you to concentrate on your own brand even more, increase the value of your marketing efforts, and improve your customer experience.
The “niche real estate sectors” are 10 most lucrative real estate niches. The reason that these specific niches work is because they have a high demand and low supply.
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