It pays to think strategically about your profession in a competitive sector like real estate. Finding a niche or expertise that suits you, your region, and your business goals is one of the most basic strategies you should explore.
What Are the Main Real Estate Categories?
Let’s start with the general categories that real estate professionals typically fall into before we get into specific skills and niches, more here:
- Residential real estate sales
- Commercial transactions
- Management of real estate
These categories are too broad to be called actual specialties or niches; instead, they’re more akin to practice areas. Because each sector necessitates a distinct set of skills, most real estate agents concentrate on one. Some people do shift from one area to another, but it’s uncommon to do more than one at a time.
Residential Real Estate is my area of expertise.
Residential Sales Agents (or Brokers) help individuals and families buy and sell single-family homes. The major area of practice is residential real estate. It also has the lowest admission barrier. Real estate pre-license courses are all that is required, not a college diploma.
Specialization in Commercial Real Estate
Commercial Sales Agents (or Brokers) help businesses and real estate investors buy and sell office buildings, retail centers, and other commercial properties. Commercial agents are expected to have at least a four-year degree in business, finance, or a related profession, and the agreements are larger yet take longer.
Property Management is a specialized field.
Property managers aren’t in the business of selling anything. Instead, they manage the rental properties’ day-to-day operations on behalf of the property owner. They manage the financial return and protect the property owner’s investment.
These properties could be either commercial (such as retailers in a mall) or residential (such as homes) (like apartments in a complex). In most areas, property management requires a broker’s license. The path to becoming a property manager is different for everyone, however the majority of property managers have a bachelor’s degree and/or additional credentials.
Why Do You Need to Pick a Niche?
Because each main field of real estate involves a wide range of property types, agents tend to specialize in a specific speciality or niche. You can become an expert in one field by “niching down.” You’ll also be able to save money on marketing.
For example, you can use web marketing to target specific phrases or mailings to a specific neighborhood. By focusing your brand, specializing also enhances referrals. You’ll become renowned as the expert in your field.
How to Pick a Lucrative Real Estate Niche
You might focus on a specific type of property or a specific sort of client. Unless you live in a remote location, you’ll almost certainly do both. If you have a lot of properties or clients, you might want to consider restricting your focus regionally.
When you “farm” a certain neighborhood, development, or portion of town by focusing all of your marketing efforts there, you’ve created a geographic niche. Choosing a speciality isn’t like marrying—your priorities can (and almost certainly will) shift over time. Here are a few things to think about:
- What piques your interest? What can pique your interest?
- What is suitable in terms of geography? What is available in your area?
- What do you have in your neighborhood that no one is marketing to? What are the niches that aren’t filled?
Property-based real estate specialties are some examples.
Focusing on a specific type of property is a popular way to specialize. Here are a few illustrations.
1. Specialty in New Construction
In residential real estate, new build homes bring a unique combination of issues and considerations. You’ll run into different challenges and traps than with resale properties, so it’s a great place to hone your skills. For the same reasons, new development can be a niche in commercial real estate.
2. Luxury Real Estate Expertise
The lifestyles of the wealthy are distinct, as is their real estate. The luxury market is vast, but equally challenging to break into, whether we’re talking about residential or commercial property. It necessitates a completely new strategy to networking, marketing, and mortgage financing.
3. Land and Development Expertise
To broker the sale of raw or developable property, you must be familiar with a wide range of variables that influence development value, ranging from politics to environment.
Farms, ranches, and equestrian properties are all options.
Properties used for agriculture and/or horse stabling require specialist knowledge to value and market them appropriately. They can be commercial (as a land speciality) or residential (for small family operations).
5. Green Real Estate is a specialized field.
Green real estate is steadily increasing in popularity, both in the residential and commercial sectors. Understanding and enthusiasm for cutting-edge green technology are required.
Other Residential Real Estate Specialties Examples
There are numerous other residential specializations based on the use of the property or its distinguishing qualities. Single-family homes are a popular speciality that frequently necessitates specialization. Condos, townhouses, and duplexes, as well as mobile homes and parks, all pose unique issues. Vacation houses and second homes necessitate a distinct sales and marketing strategy. Alternatively, you might concentrate on learning about certain aspects such as beachfront property, historic value, or smart homes.
Other Specialty Areas in Commercial Real Estate
Office buildings, industrial property, retail space, and shopping complexes are examples of commercial real estate specializations. Commercial real estate includes multifamily housing (such as apartment buildings or complexes).
Other niches include hotels and various forms of short-term rentals. Self-storage properties, medical complexes, parking lots and garages, as well as mineral, air, and water rights, are all oddballs. There’s also business brokerage, which entails not just selling real estate but also all of the associated corporate assets.
Client-Centered Real Estate Specialties are a few examples.
Another strategy to narrow your focus is to focus on a specific sort of client.
1. Specialty of the Seller Representative
“Listing agents,” “seller’s agents,” or “seller representatives” are real estate agents who specialize in helping clients sell their homes. On both the residential and commercial sides of real estate, there are seller representatives.
It’s a well-liked strategy. Because not all purchasers hire their own agent, you may end up being the only agent on the sale, resulting in a higher commission. That’s only one of the benefits of working as a seller’s agent.
3. Expertise in Buyer Representation
You are the sole advocate for the buyer as a buyer’s agent or buyer representative. On the plus side, this means less interaction time because buyers are more eager to make a sale. Being a buyer’s agent, on the other hand, always entails splitting the commission with a seller’s agent.
Residential or commercial buyer representatives are available. Depending on your market, representing purchasers can be a significant speciality. You might want to narrow your focus even more. You could, for example, choose to focus on first-time home buyers.
4. Investor-Client Expertise
If you work with real estate investors, you’ll be dealing with people who want to buy, sell, and own property for financial benefit rather than for personal use.
Investors may be interested in residential, commercial, or mixed-use properties; regardless of the property type, they will almost certainly choose a commercial realtor with a background in business and finance. Real estate investing can be approached in a variety of ways, giving you the opportunity to specialize.
5. Demographic Expertise
Many agents have effectively focused on the demands of Baby Boomers who are downsizing their houses. As more Millennials enter the homeownership market, you’ll hear talk about specializing in their specific demands and marketing strategies. These strategies appear harmless enough, but be aware of the legal implications of marketing to specific populations.
The Fair Housing Act and Specialization
You must be very careful when marketing to any niche to avoid violating The Fair Housing Act (FHA), which prohibits discrimination based on race, color, religion, national origin, sex, handicap, and family status.
California, for example, has its own legislation that protects additional classes. The FHA can be more difficult to comply with than it appears on the surface.
Many activities that appear to be smart marketing (for example, presenting a property as “family-friendly” or “ideal for empty nesters”) are really illegal. It’s the same with publicizing crime data, racial demographics, or even school district rankings.
It is just as criminal to violate the FHA by accident, so be aware of the dos and don’ts. Any form of specialization, whether based on geography, client type, or property attributes, can lead to FHA violations.