By Karen D. Friedman | 08.17.20 8:00 AM
What is a niche? If you aren’t familiar with the term, a niche in real estate refers to a specialization. The options for specialization is the beauty of real estate.
Maybe you’re asking yourself, “why not specialization in everything?”
Let’s think about the medical field for a moment.
When you get your medical degree, you don’t become a doctor of everything. You decide what interests you the most and specialize in it. Whether it’s internal medicine, neurology, dermatology, there are many paths to take. The same goes for real estate.
Real estate niches start with the two main markets: commercial and residential.
We’ll go over what’s available within each segment and explore the benefits and advantages of each. Before we dive in, let’s discuss why a niche in real estate can give you more clients.
Importance of a Niche in Real Estate
Having a real estate niche is a great way to stand out. It helps edge out competition. You focus on a specific demographic when you choose a niche.
For example, when you are known for being an expert in the downtown area or for being an expert in beachside properties, you draw clients seeking real estate in those areas.
This is because you are perceived as the authority for those areas.
If a home buyer wants a beachside property, they will contact the beachside property agent and not the downtown agent.
Sure, the downtown agent can help them, but they won’t know as much about beachside properties as the beachside agent. When given a choice, people will pick the real estate expert instead of the real estate generalist.
This is why finding your real estate niche is a powerful strategy for converting more clients.
Choosing a niche in real estate specifies the demographic you work with. Therefore, you will attract more clients because the competition is smaller.
Real Estate Niche Markets: Commercial
You’re probably wondering what the best niche is. Well, the best niche is the one that you’re going to be passionate about.
Let’s look at the perks of commercial real estate and then how you can create a niche in commercial real estate. This sector is great for people who get excited about the idea of selling large properties.
The benefit of specializing in commercial real estate is the opportunity to earn a large commission.
To keep the math simple, let’s say you have an apartment complex selling for $10 million. 3% commission on $10 million is $300,000. Even after you give the brokerage their share, that’s still a big paycheck.
The potential to make big money in commercial is always a draw, but the inventory is not as large as it would be on the residential side.
If you are passionate about this sector, then join a company or a team that will train you.
Commercial Real Estate Niche Ideas
A few commercial real estate niche ideas include:
- Hotel real estate
- Retail spaces
- Office buildings
- Apartment complexes
- Raw land for development
After picking one of these niches, you can qualify even further. For example, you can be a commercial real estate agent who specializes in apartment complexes near the beach.
This will make your market very specific.
Real Estate Niche Markets: Residential
Many people do start on the residential side because of the high inventory. Because of the high inventory, there is opportunity to create more specific niches in real estate.
Along with that, certain properties are able to yield high commission checks.
Take luxury real estate for example.
This is a market area within the residential sector that has expensive property. Typically, luxury real estate sells for $1,000,000+. With a 3% cut, you close a deal and earn $30,000.
Because the sector has more inventory, you can find more property to list and more clients who want to buy.
Therefore, you have the potential to move more in production than you would in the commercial sector.
Residential Real Estate Niche Ideas
A few residential real estate niche ideas include:
- Single-family dwellings
- Manufactured home
- Mobile homes
- Luxury real estate estate
The benefit of residential real estate is the client size. Compared to commercial, residential properties have more potential buyers. Therefore, you can create a more specific niche to dwindle the competition and increase your client potential.
How to Pick Your Niche in Real Estate
There are tons of qualifiers you can add to these specializations to make your niche more specific. The more specific you go, there will be less competition. However, you should balance this.
Making a too specific niche will exclude too many clients.
Remember, the purpose of a niche. You want to create an identity in real estate that tells people your specialty. When you specialize in a sector, you become the “expert.”
That’s because you spend your time learning about your specific area as much as you can. Therefore, you will create a level of expertise that other–generalist–agents can’t.
Let’s say you decide to focus on the downtown condos. You will market yourself as the downtown condo guru.
When people think of condos, they will think of you.
How to Become an Expert in Your Real Estate Niche
Once you have found the niche that speaks to you, concentrate on being the best in that field. The more you know about your niche, the more expertise you will have.
Here is how you can develop your niche in real estate:
#1. Educate Yourself
Educate yourself on the contracts and practices while selling real estate in your niche. For example, the sales contract for a condo is different from the sales contract for a single-family residence.
Research the paperwork, workflow, and practices of the legal and technical aspects of your niche.
#2. Get Familiar
Next, you should familiarize yourself with the properties, people, and language used. This will give you a vernacular for your real estate niche. In other words, get to know your client. Here is how you do this: get out of the office and into the field.
Physically see the properties you want to sell. Meet the people who are interested in these properties. When you are familiar with your real estate niche, you instill confidence in your client that you are the right person for the job.
#3. Build Experience
As with anything, this will come with time. Experience in your niche is vital to becoming the expert. So, immerse yourself. Concentrate on getting as many deals as you can to gain experience.
#4 Brand Yourself
Your brand will dictate how people remember you. When you market yourself, don’t forget about your brand. Your niche in real estate will make your band. So, when people see your name they know what area you specialize in.
If you use ads, newsletters, digital content, or even word of mouth, then ensure your professional name is associated with your niche. That is how you create your brand.
Final Thoughts on Your Niche in Real Estate
Now you know the importance of having a real estate niche, what is available to you in both the commercial and residential sectors, and how to create it. Choosing the right niche can help convert leads and bolster your business.
Just remember, the best niche is the one that fuels your passion.