Riches are in "Real Estate Niches". In this guide you'll learn:
To niche or not to niche? That is the million-dollar question. Is focusing on a real estate niche a good business strategy? And if so, how do I go about choosing a lucrative niche?
I'm going to share hard facts most real estate agents consider counterintuitive. I say this is because when it comes to niche marketing, the most common question is:
Yes, I realize that was three questions. But, all three questions revolve around one idea.
It's the idea that if you're known in your community as a specialist in one niche, you will automatically be excluded by those who need an agent in a different niche. Essentially it boils down to losing out on potential income.
Hey, I get it! Why in the world would you exclude a huge chunk of the market on purpose? It doesn't make sense, does it? Smaller market size obviously equals lower income.
I'm going to explain how going against the grain, and perhaps your gut feeling can lead to an extremely lucrative real estate business.
If you want the quick answer to, "Does niche marketing work"? Or better yet, "Is it profitable?" The answer is, yes!
If you want to learn how I tripled my real estate business within 9 months by focusing on a niche, keep reading. I'll teach you everything I know about real estate niches so you can duplicate this process in your own real estate business.
Niche marketing in real estate is the practice of dividing the market into specialized areas for which your service is made.
In other words, it's the practice of working with a specific group of home buyers or sellers that have a particular need due to their current circumstances. After all, every prospect has a different need due to their circumstances and should be offered a specific solution for their particular need.
For example, a first time home buyer will have drastically different needs from a married couple going through a divorce and need to sell their property. Does that make sense?
A Realtor who focuses on a niche will create their marketing, messaging, and services around the specific needs of one particular group of people.
Niche marketing has been around a long time. However, when it comes to implementing it in the real estate industry, most agents are still holding back from pulling the trigger.
The misconception is, "Niche marketing works in other industries. Not real estate".
Many Realtors believe niching down will somehow pigeonhole them into a smaller market. Therefore repelling potential clients. After all, you want to work with as many clients as possible, right?
Hey, I hear ya! I felt the exact same way until a series of unfortunate events lead me to do something I never thought I'd do - niche marketing.
Let me explain…
I got my real estate license back in 2002. Right from day one, I hustled my butt off. Each year was better than the previous one. And each year, I worked a little bit harder.
In 2009 when the market started to crash, my business started to suffer. I had no idea what to do because I couldn't possibly work any harder. Not only was there very little money coming in, but I also started dipping into my line of credit to make ends meet.
I eventually burned out. I couldn't take the hustle any longer. I had no desire to make another cold call, host another open house, or chase another lead. The worst part was the 6-figure debt I racked up.
So, what does this have to do with niche marketing? Everything! The lack of money forced me to rethink my lead generation and conversion strategy.
You see, from day one, I was taught to work with everyone. It didn't matter if they were first time buyers or luxury sellers. I was to hit the phones until I found a lead. Then work that lead relentlessly.
I didn't realize times were changing, and this so-called "strategy" was quickly becoming unpopular with the public forcing me to work harder just to get the same results. I started to believe I was a failure because the thought of cold calling made me feel sleazy.
The problem was, I couldn't share my true feelings with anyone. Telephone prospecting was the norm. Every real estate coach under the sun was teaching cold calling and objection handling scripts. There was no getting away from it.
My world was crumbling down financially and emotionally, and I had no one to turn to for help.
Without saying anything to anyone, I fired my real estate coach. Then, I went outside the real estate industry to study world-class marketers. I had to find out how they were able to grow a successful business without old school prospecting.
I quickly realized the most successful entrepreneurs were niche marketers. They didn't work with everyone under the sun. They picked one niche market and focused on solving the biggest problem in that niche.
Now, all I had to do is apply what they were doing into my real estate business.
After doing some research, I realized 53% of the transactions in my city were first time home buyers.
Since I loved working with first time home buyers, I decided I was going to get into the first time home buyer niche!
From that point on, I focused on solving the most significant problems and challenges the first time buyers had.
I have to be honest, I almost did give up. I wasn't seeing results right away. It's not because niche marketing doesn't work. It's because I was doing it wrong at first, and I had no patience. I needed income fast!
Once I tweaked my marketing, the flood gates opened, and the leads started coming in. For the first time in my real estate career, online leads wanted to work with me without me having to chase them.
So yes, picking a niche in real estate works! It not only saved my real estate business but allowed me to work less, with less effort, and not worry about money again. I certainly didn't expect to triple my business within 9 months. I had to hire a team member just to keep up with the lead flow.
Picking a real estate niche is an essential contributor to success. It can make or break your business.
Two facts you must understand when picking a niche:
Research is everything when selecting a niche in real estate. It's not a matter of choosing one out of thin air. Yes, you may end up picking the right one by accident. But, if you want to know if you're on the right track, there are a few super essential questions you must ask yourself.
Answering these questions will help you understand if a niche is worth pursuing.
Before I started going after the first time buyer market, I asked myself the same questions. These questions allowed me to stay clear of other niches I was considering.
There are many reasons why you'd want to stay clear of specific niches. Especially when you're starting out.
The most important one is "competition." The stronger your competition, the tougher time you'll have competing in that niche.
Let me explain it this way:
Let's say you want to go after the luxury real estate market in your city.
After doing some homework, you realize 5 agents also target high-end homes. They've been around a long time and have pretty much cornered the high-end market. Oh ya, and their messaging is also on-point. If anyone is thinking about selling their luxury home, you can bet one of these five agents is going to get the listing.
Knowing and understanding this, you now have two options. To still go after the niche, or stay clear.
I'm sure you've heard the phrase, "Anything worth having is worth waiting for." Or something along those lines?
Let's look at it this way: You can't just go to the gym once or twice and expect to be fit. Niche marketing works the exact same way. In fact, isn't that the case with most things in life worth having?
Unfortunately, we live in a society that demands fast results. Marketing messages have to lead us to believe there is a magic pill. And that mentality is what kills real estate businesses.
"Trying" something for a month or two is not going to give you enough market feedback to see if it's working.
Six months (on average) is about what it takes to start seeing results. But, and this is a big but, once your marketing starts to catch on, your results will far outperform any one-on-one cold prospecting you could have done. And that's when business becomes fun again and very profitable.
It takes patience because your local market has to first check you out. See what you're all about. Stalk you a little. Once they've seen you for a while and know you're for real, then and only then will you start getting the inbound leads.
Your market must first get to know you. Then trust you. And trust takes time and patience.
There's a concept in the marketing world called "Red Ocean, Blue Ocean."
A Red Ocean is a market that's been saturated by your competitors.
A Blue Ocean is an untapped market. A market with very little to no competition.
Let's face it, most Realtors are "general practitioners." I say this because when you look at their marketing, it all looks the same. There's nothing that separates one agent from another. This makes it tough for someone to choose the right agent for the job.
This is what's called the red ocean. How much you charge becomes the only differentiator.
Let's look at an example in the restaurant industry.
I chose this industry because it's one of the toughest to break into. Most restaurants, like Realtors, fail within a year or two and close down their business. Both industries are a red ocean.
Let's take a look at Cracker Barrel and see how niche marketing made this restaurant successful.
The most significant difference is how they attract their customers.
Unlike most restaurants, they're far more interested in attracting the people passing through the town than attracting the people who live in that town.
About 1/3rd of their marketing budget is spent on billboards alongside the highway. And that makes sense since their restaurants are located along that same highway.
They are clearly going after the traveler niche. And travelers have to eat too, right?
On top of that, their food is not the typical fast food you see at these roadside stops. They serve freshly made southern home-style cooking at an affordable price.
Oh ya, and did I mention their restaurants also include a store where you can purchase all sorts of items? Brilliant right? People can shop while waiting for a table.
Cracker Barrel was profitable right from the start because they chose to be different. They weren't interested in opening up another restaurant in town that blended into the noisy market. There found a need in the market and filed it.
See where I'm going with this?
The biggest mistake real estate agents make is they try to be better. Let's face it, the real estate industry is a red ocean. The only way to compete is to be different, not better. And it's easier than you think.
So, how do you create your own blue ocean?
Find a problem that already exists in your market and solve it by being different. Here are the steps:
Simple, right? Let's break it down.
An "Avatar" is your ideal client. As in, one person.
The biggest problem in the real estate industry is, Realtors, try to be everything to everyone. This makes it impossible to target more of your ideal clients. When researching a niche, you are primarily focusing on one type of person (the avatar) with a specific problem.
You can get more specific as to who your avatar is by considering the following 3 categories.
GEOGRAPHY: Your niche is determined by a geographical location.
DEMOGRAPHICS: Your niche is determined by some sort of statistical data. For example, age, race, ethnicity, gender, marital status, income, education, employment, etc.
PSYCHOGRAPHICS: Your niche is determined by the behavior of your ideal client. These include personality, values, opinions, attitudes, interests, and lifestyle choices.
Every niche comes with its own set problem that must be solved by you, the agent.
For example, a first-time buyer's problem revolves around is financing, or understanding how the buying process works. They've never done this before and are looking for answers.
An investor, on the other hand, understands the buying process. Their biggest challenge is finding the right home with the most significant profit potential.
See where I'm going with this? This leads us to the last step.
This is where your marketing needs to stand out and shine. It does all the heavy lifting for you as fas as attracting your niche to your business. Your marketing only works if you understand what problem you're trying to solve.
A "Free home evaluation," although still used by many agents, is not good marketing. This type of marketing has been so overdone. It's nothing more than white noise that blends into the background.
The purpose of your marketing is to stop your avatar from doing whatever they were doing and say, "finally, someone who understands me and knows how to solve my problem."
Your message must be direct and to the point. It must cause your avatar to take some sort of action. This is only possible when you offer a solution to a specific problem with your marketing message.
You may be thinking, "Ok, I see how selecting a niche in real estate is a great way of building a profitable business. But, what are the most lucrative niches?"
This is where I drop the bomb! The meaning of "Lucrative" may lead you to believe that a lucrative niche in one city will also be profitable in a different town.
That is simply not true. Let me explain...
Every city and market is different. What holds to be true in one part of the country may not hold true in a different part of the country.
Let's say "Agent Tom" works in New York City, and his niche is selling luxury condos.
Susan, also an agent, meets Tom at a real estate conference and asks him, "How are you so successful? What niche are you in?"
Tom turns to Susan and says, "You want the secret to huge profits? Get into the niche of listing luxury condos. Only condos over a million dollars. The sellers are usually business owners with lots of money. They don't have time to mess around with interviewing 3-5 agents, and they don't try to negotiate for lower commissions. It's super-profitable."
What would you do if you were Susan? Before you answer that, let me explain something.
Susan lives in a small town. The population of about 10,000 people. The most expensive home is $200K. And there are no condo buildings.
Ok, now what would you do?
See what I mean when I say, lucrative in one city may not be profitable in another?
A lucrative real estate niche can only be profitable if two things exist:
Below, I've categorized real estate niches into three categories.
If there's one piece of advice, I can give you it's this. The more substantial your city (in terms of population), the more you'll want to combine these categories to further narrow down your niche.
Yes, of course, it will. In a positive way. Isn't that the point?
The biggest fear among Realtors is their marketing message will repel a ready-to-act lead from contacting them because they require a different type of Realtor. And if that's what you're thinking, I don't blame you. I had the same fears.
The reality is, yes, that may and probably will happen. But that's a good thing.
The opposite also holds true. You will attract more of the same type of clients with your marketing message. Isn't that the entire point? To only work with your ideal type of client?
The reason why niche marketing works so well is that you will attract more of your perfect clients than you will lose out on. We all have the same amount of time in a day. Would you instead attract more dream clients, or chase random leads trying to convince them they should work with you?
All I can say is if I knew then what I know now, my real estate business would have been way more profitable much sooner.
Once I implement niche marketing in my real estate business, I never looked back. Within 9 months, I tippled my business.
The best part wasn't the money. Although it obviously saved my business. It wasn't the new family vacation I was able to afford. Heck, it wasn't even the income properties I was able to purchase.
It was the freedom to live the type of life I wanted to live. Since leads were now reaching out to me, I didn't have to spend hours a day cold calling and stressing over my next commission cheque. And stressing over how I was going to convince a lead to work with me. And stressing over protecting my commissions from a hard-ball negotiator.
I woke up every morning with a smile on my face knowing I made the right decision to focus on a niche in real estate.
There are many ways of attracting home buyers and sellers to your real estate business. But, as you can see, niche marketing has been proven time and time again that it's the best way of attracting the type of clients you want to work with.
I've put together a free video course that outlines the 3-step business strategy I used to triple my business in 9 months without any old-school prospecting.
It's designed to help you go from unpredictable and sporadic income to a steady stream of qualified leads that won't want to work with anyone else.
If you're interested, click the button below to get started.
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