Graham Wood is senior editor for REALTOR® Magazine. He can be reached at email@example.com.
Identifying Your 3 Strongest Niches
Choosing which aspects of real estate to focus your business on is harder than it seems. Here’s a rule of thumb: Choose what you know, what you love, and what you dream about.
October 9, 2014
There is any number of real estate niches you could become an expert in. Your specialty could be saving historic homes from demolition, untangling the financial web for divorcing couples, or even working with clients who don’t wear any clothes. Or maybe none — or all — of that interests you.
One of the hardest parts of coming into the real estate business is deciding what kind of market you want to focus your efforts on. You might find something you love about every type of property, but being a jack of all trades and a master of none isn’t necessarily the best road to success. That’s why many real estate professionals identify a certain buyer/seller segment or property type to cater to.
More 'First Year' Stories
We have a collection of stories from practitioners who faced all kinds of challenges in their first year on the job. Read all of them here.
“The transition into an agent was natural,” Krieg says. “As a builder, I tried to hire the best agents I could find and was never fully pleased with their performance. So when my contracting career ended, I wanted to go be the agent I had always wished I could find to work on my projects.”
The problem, he says, was figuring out which types of properties he would be best at selling. “I have passion and enthusiasm for many kinds of properties and activities. I’ve been that way my whole life. I didn’t want to just do anything and everything.”
Krieg decided to break down his real estate business into three categories: what he knows best, what he’s most passionate about, and what he dreams of doing. Using these three pillars, he was able to quickly figure out what his most successful niches would be.
Niche No. 1: Stick to What You Know
If you’re a new agent or have some experience under your wing but are still struggling to identify a niche market you can be successful in, think about what part of real estate you had the most knowledge of before coming to the business. Perhaps a previous job required you to work in a certain sector of real estate or with a certain segment of buyers. Identify the area of real estate you already know and make that your first niche.
“You will never fail at what you know,” Krieg says. “It will morph into other things, like my career has.”
For Krieg, what he knows best is hotels and resorts. His parents were successful hoteliers, and they raised him in a hotel. “I never lived in a house,” he says. “I grew up as a kid and young adult in the hotel and resort business with my family. I know the business well from the ground up. I can relate to an owner on a financial level as well as a personal level when selling something you have built with blood, sweat, tears, and, at times, plenty of risk. I can communicate on their level as an owner and assist in the very difficult transition into a seller.
“My family connections in the lending and franchise roles as business partners and in that industry is what got this niche off the ground for me,” he says.
Niche No. 2: Do What You Love
Your passion may be something different from what you already know, but when you love something, you’ll put your all into it. And isn’t that the true measure of success?
As an outdoor enthusiast, Krieg has always had an affinity for recreational properties, such as those with a lot of acreage for hunting and farm-style ranches.
“I have always enjoyed the outdoors as a young man and as a father of boys who love to fish and hunt,” Krieg says. “After being an agent for a while, I saw these brokers who spent their days on beautiful properties with buyers and sellers. They had the same enthusiasm for natural resources and the outdoors that I do.
“I began studying maps, water rights, crops, weather patterns, and I became wise in the ways of buyers and sellers of these types of properties. I also sought out professionals in those fields and asked for help and info.”
Once he learned all he could, he began targeting his marketing to those buyers.
“You don’t need to know how to raise a cow or a horse to sell a property where you’d raise them,” Krieg says. “You need to know who buys that property and how to reach them. It’s about placing yourself and your marketing in the proper places where you’ll find those buyers.”
He made connections through local conservation groups, such as the Rocky Mountain Elk Foundation, which advocates for Colorado’s hunting heritage, as well as Ducks Unlimited and Trout Unlimited, two wildlife protection agencies.
Niche No. 3: Dream Big
Your third niche may be the most difficult to break into, but depending on what it is, you could likely take it over as your own. It should be your dream — the part of real estate that you never thought you could be involved in. The reason chasing a dream niche can be so successful for you is because of the hard work and effort you’ll have to put into it. What doesn’t come easy tends to reap valuable rewards.
Krieg’s dream niche is coastal properties in Costa Rica. It’s an extension of his love for the outdoors.
“When it comes to my passion for the ocean and outdoor adventure, Costa Rica has both on a minimalist level,” Krieg says. “Plus it has resorts and hotels, a great economy, no military [it was abolished in 1948], and lots of big U.S. investment money. It’s a safe place to invest.
“Real estate isn’t a local business anymore, with social media and the like. I can compete in any genre of real estate on a global scale from anywhere. I don’t refer out anything. If a client wants me to assist them in buying a property anywhere in the world, with technology and a plane ticket, I can close any property.”
Krieg has closed two deals so far in Costa Rica, though he does admit that this niche is more of a “work in progress” than his other niches.
Tips for Making Your Niches Successful
- Be brave and listen for cues: “Don’t be afraid to be the new guy nobody has heard of,” Krieg says. “I was never intimidated by the players, so to speak. I work the expired listings like a show pony; I do old school right. With expireds, the sellers are already miffed that their place didn’t sell with the first, second, or third agent they hired. I got wise by listening to my sellers on listing appointments. I heard from them so many times that their previous agent didn’t listen to what they wanted from him.”
- Get involved: Krieg says joining organizations that your ideal buyers and sellers are involved in is the best way to meet the clients you want. “I went to trade shows and handed out cards,” he says. “I just showed enthusiasm — that’s all it took to get their attention. I went to national events. If a guy is standing at a booth in a Safari Club International event buying $1.5 million in hunts over the next year, there is a good chance he is a buyer or a seller of a hunting property, or he knows someone who is. I say, ‘Here is my card.’”
- Use the tools you’re given: “All companies have them, and I used them,” Krieg says. “The most successful people and companies have systems in place and use them regularly. You can’t run and gun and expect to last. So fill up the tool box and get to being a real estate mechanic.”