What are real estate niches? Well, a retail store doesn’t sell just “anything.”
You have boating stores, hobby shops, and even pet stores.
Likewise, most real estate professionals focus on a specific real estate niche.
Choosing a real estate niche creates a strong focus for your business. Your marketing and networking energy are all going in a single direction — a direction that will hopefully yield the best results.
But how do you choose the best niche for you?
Why should you choose real estate niches?
Not everyone does. You don’t have to choose a real estate niche — but it does make building your career easier. When you choose a real estate niche, you pick a direction you want to focus on. From there, you can develop your branding and marketing and choose the clients you want to go after.
The most popular real estate niches
Real estate specializations come in many flavors: location-based, property types, and more. Let’s start with the basics to find the right niche for you.
You’ve probably already done this without thinking.
Location-based niches are the most common. A real estate agent can focus on anything from a specific neighborhood to a single zip code, city, or county. This usually starts naturally — there are only so many places you can go, and there’s only one state you’re licensed in (barring reciprocity).
But you can build authority and trust in your brand by becoming an expert in a small region’s properties, amenities, and features. Research extensively to learn everything your potential clients want about the area.
Specializing in a location means that all your marketing will be focused on prospects in this area. The focus means generating more effective leads and continually building on past contacts and successes. Further, your advice will be more relevant to your buyers and sellers — they will be more likely to have positive outcomes.
2. Property Types
Other realtors focus on a type of property instead of a location. Maybe you love historic homes, waterfront properties, or luxury mansions. Or maybe you want to work with a builder selling new construction homes.
Focusing on a type of property means that you get to know everything about that property type. Types ripe for a niche focus include cabins, multi-family homes, and short-term rental properties — things you can learn much about that others may not be focused on.
Working in this niche makes you more likely to work with multiple neighborhoods. You may work throughout the entire state. But you’ll always know the current available inventory in the back of your mind; because you’re specialized, you can become someone’s source of truth for the area.
3. Luxury Buyers
Specific types of buyers can be a niche market in themselves. Take luxury buyers.
Luxury buyers are frequently flying under the radar. They want to work with someone who isn’t struck by their wealth and understands specialized loan instruments, like jumbo loans.
These buyers tend to own multiple properties and spend time at each. They also tend to buy properties for family members in addition to themselves.
This is your niche if you’ve ever wanted to be a Realtor to the stars.
Why are luxury properties a harder sell?
It’s not just that there are fewer buyers — or that the buyers are pickier. Luxury properties are more difficult to close because they frequently require jumbo loans.
4. Rental Properties
In highly competitive markets, many individuals choose to rent. So, many real estate agents act as intermediaries between renters and property management companies.
You’re not going to get a giant payday out of finding renters. But you will get a steady income, and the deals will come faster and in greater volume. You probably aren’t going to sell ten homes a month right out the gate. But you could rent ten condos.
You can also focus on rental properties from the other side — real estate investing. You can work with buyers interested in securing a real estate investment rather than a traditional home buyer. Real estate investors usually know exactly what they want. You can even buy some rentals on your own.
5. REO Properties and Foreclosures
Investors frequently want to invest in REO (bank-owned) properties and foreclosures — usually single-family homes. But they can be difficult to manage because you’re dealing with a bank rather than an owner. A bank doesn’t always have urgency regarding selling a property and will frequently take longer to close.
But if you learn to navigate these distressed properties, you can greatly benefit your buyers. Investors are excellent to work with because they will keep coming back. They are either flipping properties or renting them out — they will want to build their inventory.
6. Commercial Properties
Commercial properties: retail shopping centers, office buildings, warehouses, etc. These high-value properties can make you a great commission (although your percentages won’t be as high as in residential real estate).
Commercial properties go through a far more complex selling process than residential properties. Because these properties typically sell for far more than residential real estate — they even lease for much more.
7. Retirement Communities
The number of Americans over 65 continues to grow. They made up just under 17% of the population in 2020 and are expected to reach 22% by 2050.
Buyers in this real estate niche often have specific needs for the homes they buy. Many will be looking for accommodations like single-floor homes or accessible showers. Others will want nearby public transportation and easy access to grocery stores and medical offices.
A great advantage to specializing in the retirement market is that many sell and buy a house. That allows you to manage both transactions, making it a profitable real estate niche.
8. New Construction
In areas where existing real estate inventory is stretched thin, there are great opportunities for realtors specializing in new construction homes.
A new home construction specialist can lead buyers through buying a new home to help them get the most out of the purchase. They ensure that their buyer gets independent home inspections and that they understand all the contracts and paperwork.
And because you’re working with a builder, you will get a steady stream of leads.
9. Land and Development
This area requires a deep understanding of issues around development. Realtors who wish to specialize in this area need to know about zoning, local ecology, and the politics and future infrastructure needs of an area.
Deals on land for development often take longer, but, like other commercial properties, the higher ticket price balances out the wait. You can become an expert consultant and specialist as you learn more about land and development.
How to find your perfect real estate niches
There are a lot of real estate niches out there. How do you find the niche that’s perfect for you? You can specialize in anything you want — but you need to find something enjoyable and profitable.
Ask yourself the following questions:
1. What type of property do you want to work with?
Do you love single-family homes? Stately mansions? Condos? Some agents become agents because they love working with people. But others have a true love for real estate. Think about the properties that you’d most like to represent.
2. What type of clientele are you looking to work with?
Maybe you want to work with first-time buyers looking for their starter homes. Or maybe you want to help retirees find affordable housing. Being a real estate agent is a real chance to make a difference, so think about who you want to help.
3. What is your experience level?
Some areas of real estate — like commercial real estate — require more experience. You can, of course, specialize in it now. But it would help if you were certain that’s the career trajectory you want because it can become time-consuming.
4. What are your strengths and weaknesses?
You may love commercial real estate — but you hate writing contracts. If that’s the case, it’s a bad idea to try to focus on this niche. Think about your strengths and weaknesses logically. It’s not a judgment or value call; it’s just what you’re best at.
5. What is the market like in your area?
Maybe you love rentals, but you’re in a market that doesn’t have any. you also need to be realistic about the market in your area and what will sell. You might be able to pivot into another area at some other time, but that niche might not be viable for now.
Once you have answers to these questions, you can narrow down your options. Try to think about the most satisfying transactions you’ve taken part in. Do they have any commonalities? You can choose as many real estate niches as you want — as long as you don’t fragment your marketing.
Your real estate niches and branding
Why do we select real estate niches? It’s not just to become an expert — it’s also to direct our branding and marketing.
For example, a Realtor specializing in first-time buyers will want to be approachable and friendly. First-time buyers are usually intimidated by the process, so you want them to feel comfortable working with you.
Meanwhile, a Realtor specializing in land and farm transactions will want to market directly to those interested in buying such properties — an agricultural audience. That means different zip codes; for one, you don’t want to send mailers and flyers to the city.
Real estate niches don’t determine your branding, but they do inform it. It should be well-embedded into your marketing strategy. The more experience you get within your niche, the more you can leverage it to further your branding and identity.
Conclusion: Should you focus on a niche?
You don’t need a niche. Not every real estate professional has one. But likewise, selecting a niche doesn’t mean excluding other properties — it just means that you’re focusing on a particular type. You can have multiple niches or none at all.
Many real estate professionals don’t yet have a niche when first starting. instead, they float between different property types and regions. They land a high-value sale and a low-value sale. They work with all types of buyers and sellers.
The vast majority of real estate agents are helping buyers and sellers with single-family homes, townhomes, and condos. They represent individuals (or small LLCs) in transactions, staging properties, and running open houses.
As you develop your career, you’ll better understand what you like — and what you don’t. If any particular niche doesn’t call to you right now, it’s possible that you don’t have enough experience to know what you don’t like.
But having a niche does help you develop focus. Realtors can build their knowledge and reputation purposefully and mindfully toward a direction. And the more authority you gain in your niche, the more opportunities you’ll collect.
Even Realtors who consider themselves generalists work in niches, at least sometimes. For instance, an agent familiar with a specific part of town already has a geographic niche. Others find they are passionate and knowledgeable about a specific type of property or customer.
Think about the types of properties and real estate deals that are most interesting to you. This could be your niche if you are most excited by big commercial properties. Or, you may have a flair for deals with first-time buyers.
Commercial real estate generally leads to the highest income, with many realtors in this niche making six figures. However, this is a niche that requires additional training and one that can involve more lead nurturing before sales.
The location-based niche is easily the most popular real estate niche. Most real estate agents focus on a geographic area, zip code, or city. Other than that, many real estate agents will choose to specialize in single-family homes, townhomes, or condos.
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