Choosing one of the many profitable real estate niches is a solid step in tailoring your career.
As a real estate content writer, I write lots of real estate agent bios and lots of real estate blog content. And I can tell you, from experience, that trying to serve all buyers and sellers in your area is a shortcut to irrelevance. Savvy agents choose a specific niche in their market and focus on providing exactly what the buyers and sellers in that niche need.
In this post, I want to show you:
- Why successful agents choose a niche,
- Which niches are most profitable, and
- Which niche is the best fit for you.
Here is everything you need to know about real estate niches as a real estate agent.
Why Do Real Estate Agents Need a Niche?
When you generally pursue every buyer and seller in your area, you’re effectively competing against every other real estate agent in your market. If you’re an established agent with a solid track record of successful closings, you might be able to hold your own against the competition. But if you’re an agent who hasn’t fully established yourself in your market, you might not have the resources or reputation to win clients.
Now, when you choose a real estate niche, you narrow your audience. And that initially sounds like a bad thing…until you realize that you’re also narrowing your competition. If you niche down, you might be competing against only three or four other agents in your niche.
Which would you rather have:
- 1% of 100 local buyers and sellers?
- Or 25% of 20 niche buyers and sellers?
Niching down doesn’t mean that you can’t work with other buyers and sellers who come your way. It simply means that you’re targeting your marketing to appeal to a strategically-selected niche. This gives you the best possible return on your marketing investment while cementing your unique value in your local marketplace.
10 Real Estate Niches for Agents to Consider
Here are 10 specific real estate niches for real estate agents to consider.
1. Renters/First-Time Buyers
First-time buyers are a favorite niche in the industry for several reasons:
- They’re an easy group to reach; you know you can find them in apartment communities and on renter lists.
- It’s easier to win over a buyer than a seller because buyers won’t have to pay for your services (in most cases). This makes first-time buyers an excellent starter niche for new agents.
- First-time buyers can provide lots of repeat business over the years: upgrading to a larger home, upgrading to their dream home, buying an investment property, or downsizing; you can represent them in both the sale of their current place and the purchase of their new place multiple times!
- This group tends to buy regardless of economic conditions. In a hot market, when everyone else is buying, they want to buy too. And in a cool market, when rents are exceeding mortgage costs, they want to start building equity.
How to Market to First-Time Buyers
Focus your marketing message to first-time buyers around education. There’s so much this group doesn’t know, and by providing useful info for free (on your social media accounts, or through your Renter-to-Homeowner Program), you capture their attention and earn their trust.
It’s also important to note that this group is going to be doing lots of Googling for answers to their questions about home buying. Having a blog on your site is the best way to get free, organic leads from Google. Your blog can answer questions about qualifying for a home loan, choosing a neighborhood, and navigating escrow. Learn more about blogging for real estate leads.
Tips for Working with First-Time Buyers
Here are a few quick tips for working with the first-time buyer niche.
- Be patient with their many questions, and explain things in detail.
- Take the time to explain agency so you don’t lose your new clients to a random agent hosting an open house.
- Insist on pre-qualification to confirm that your prospective buyers can get the funding they’ll need to close the deal. If they aren’t there yet, consider offering credit repair services for a fee. You’ll get a little upfront income, and (after a little time) a qualified buyer!
2. Downsizers
Downsizers are selling off their current home for a smaller home.
Traditionally, downsizing meant empty nesters, moving into condos or retirement homes. But today, you’re just as likely to get an older millennial selling off their modest three-bedroom for a tiny house or a digital nomad lifestyle.
Either way, you’re job is the same: get top dollar for their current home and do whatever you can to smooth their transition into their next home. Ideally, you’ll get to represent them in the purchase of their new, downsized home. But if they’re looking to rent, build, or move out-of-area, perhaps you can connect them with other professionals to help them with that next phase (maybe even earning a referral fee!).
How to Market to Downsizers
Mailers work well as a tool to reach this group. Through MLS data, you’re able to see how long homeowners have lived in their homes, and potentially estimate their home equity (if you have loan data). Messages that promote a “simpler life” or “going minimal” could resonate with homeowners who are just starting to think about downsizing.
Tips for Working with Downsizers
As you work with downsizers, remember:
- This may not be a choice; they may be forced to move because of financial circumstances or mobility issues. Be sensitive to their reasons and highlight how the move will be beneficial for them.
- They will likely need to sell off or store many possessions. Have a list of storage facilities and estate sale companies handy.
- Depending on the mental and physical health of the homeowner, you might end up working as much with their adult children as with them on the sale. To protect yourself, make sure you have the owner’s written consent to disclose information about the dealings with these other involved parties.
3. Upgraders
Upgraders are the opposite of downsizers; they’re looking to sell their current home and move up to a higher-value property. This could be because they need space for a growing family, they need space for a home office now that they work remotely, or they simply want to invest their higher income in a more valuable home.
Upgraders can be found in any market condition because life changes often warrant an immediate need for more space. But late-stage recessions are a great time to market to those who are considering an upgrade…During a weak market, homeowners may be hesitant to sell, knowing that they won’t get as much for the house as they could during a strong market. But getting slow-market prices on a higher-quality home might be more than enough to offset any losses (real or perceived) on the sale of the current home.
How to Market to Upgraders
Run inexpensive social media ads showing homeowners going from cramped and cluttered spaces to larger homes that better suit their current needs.
Tips for Working with Upgraders
When working with upgraders:
- Pay careful attention to their priorities; do they need more space or just want a better neighborhood?
- Draw attention to the equity in their current home. Explain how it can be used for a larger downpayment, which can reduce monthly mortgage expenses, or for immediate needs like renovations to make the new home the perfect fit.
- Take the time to explain how market conditions have changed since their last transaction. Different conditions can lead to a wildly different buying or selling experience for them.
4. Luxury Buyers and Sellers
The luxury market is a world of its own. And breaking into the luxury market isn’t easy. But the rewards are worth the effort as this is one of the most profitable niches available.
Because the commissions are higher on these high-value properties, luxury agents can make more money on fewer transactions. You might be able to make a very comfortable living on just a few deals per year. Just plan to work extra hard for those deals.
How to Market to Luxury Real Estate Clients
Reaching luxury clients is about investing time in growing your network. Most high-end buyers and sellers aren’t simply going to Google agents. They’re going to go with someone they know and trust, or they’re going to get a referral from someone they know and trust. So you need to be in their sphere to get their attention.
This means living in (or very near) the area, having memberships at the same clubs, joining the same charitable organizations, and knowing the same people.
Tips for Working with Luxury Real Estate Clients
- Know your stuff. Yes, all agents should be knowledgeable and confident. But these clients will test you and won’t hesitate to walk away if they’re not satisfied with your service.
- Pay close attention to your image. Show that you understand the lifestyle of your clients by driving the same vehicles, wearing the same brands, and enjoying the same services.
- Gain experience by co-listing with an established luxury agent. You do all the work for 50% of the commission. But you get to have your name associated with that listing, which is invaluable in luxury real estate.
5. Military Service Members and Veterans
If you live near a military base, service members and veterans can be among the most solid real estate niches available. There are always new people coming into the area (staff, contractors, and new recruits), and a good percentage of them prefer off-base housing. You could help in the rental market, the residential purchasing market, or both!
How to Market to Military Service Members
You need contacts within the organization. Depending on the size of the base, there may be a liaison to assist newcomers with housing, so if you can get in with that person as a recommended real estate agent, you’ll have a regular stream of passive leads.
Aside from that, marketing yourself by answering questions from military buyers and sellers (on social platforms and through your blog) will help you establish yourself as the go-to agent for this niche.
Tips for Working with Military Service Members
- Understand VA loans inside and out.
- Having been a service member yourself will give you instant credibility with this group. It isn’t a prerequisite, but it helps tremendously.
- Speak their language. You’ll need to know the ranks and the acronyms used by this group to be taken seriously as a military relocation specialist.
6. Investors
Investors are one of the best real estate niches for agents who prefer working with facts and figures over emotions. And they’re an excellent source of repeat business. Plus, investors are among the few buyers in the market during a recession, taking advantage of buyer’s market conditions to get good deals.
How to Market to Investors
Networking with property managers can lead you to potential investor clients. Or you could reach new investors by hosting real estate investing workshops or seminars.
Tips for Working with Investors
- Know your numbers. Get ready to do lots of ROI calculations.
- Bring them off-market leads. Strengthen your relationships with other agents so that you’re among the first to learn of upcoming listings. Investors love having an agent who gives them a head-start over other buyers.
- Consider expanding your services. If your investor clients are holding long-term rentals, they may be thrilled to engage your property management services as well as your services as a representative in purchases and sales.
7. Divorces
With around 50% of American marriages ending in divorce, there is a need in the market for agents who specialize in helping couples sell their shared homes and find new accommodations.
While some agents may dismiss this niche as taking advantage of those in unfortunate circumstances, others see this as an opportunity to provide a service to those in need. For the right agent, this niche can be a win-win; you get a listing (plus two potential purchases or rentals) and the clients get an empathetic agent who helps them move into their next chapter during a presumably difficult time.
How to Market to Divorcing Couples
Lawyers are a good lead source for divorcing couples. You could network with those groups, and leave your marketing materials for them to provide as a resource for their clients. You could also try hosting workshops (in-person or online) on how to sell quickly during a divorce. Or, you could even watch social media for news of splits and reach out to those homeowners (tactfully, please!).
Tips for Working with Divorcing Couples
- Remain impartial. Taking sides won’t do anyone any good.
- Be empathetic but positive. Your clients may be struggling at the moment, but a new chapter is opening for them.
- Work fast. The sooner you can sell this house, the faster your clients can move on with their lives.
8. Expireds
Expired listings are most common in a slow market when there is lower demand for housing. Expireds can be a difficult group to approach because they may feel disappointed in their previous agent for failing to sell the home, which may make them distrustful of the real estate industry as a whole. This level of difficulty deters many agents from working with expireds. Which is great news for those willing to work with this niche; there isn’t a ton of competition!
How to Market to Expireds
You can approach expireds directly or indirectly. Directly would be to admit that you want the listing and lay out your plan for succeeding where the previous agent failed. Indirectly would be to ask if the owner is still planning on selling because you want to let your buyers know if the house is still available. This indirect approach can open a conversation, perhaps even allowing you to preview the property with the owner so you can start building rapport and eventually pitch your services.
Tips for Working with Expireds
- Be ready to explain what you’ll do differently than the last agent to get the desired results.
- Act fast. While a relatively small percentage of agents work expireds, you can bet that other agents will be calling them as well.
- Never lie to get your foot in the door. Some agents will imply that they have a buyer who’s anxious to see the property. But faking buyers nearly always backfires.
9. Pre-Foreclosures/Short Sales
When a homeowner misses mortgage payments, they quickly go into pre-foreclosure. At this point, they can still save the house by catching up on payments, but if they’re unable to do so, they would be better off selling quickly before the house goes into foreclosure.
Short sales are when a homeowner is underwater on their mortgage (meaning that the current value of their home is less than the amount they owe on their home loan) and wants to cut their losses by selling anyway. This is an extreme situation, but we saw it quite often during the Great Recession.
In either case, you have homeowners in distress who may need to sell or face foreclosure. Of these options, selling is typically the better option. But the sellers need to act quickly. And you can help them navigate these complex transactions.
How to Market to Homeowners Facing Foreclosure
Lists of pre-foreclosures are available on foreclosure.com. So it’s easy to locate these owners and reach out. The best approach is to ask the owners if they are interested in keeping the house or in selling it. If they want to keep the house, and you’re able to help them reach a deal with their lender, you might not get a commission check, but you will have earned a raving fan who will likely send you referrals and come to you when they’re ready to sell. If they do want to sell, you can advise them on how to sell before going into foreclosure.
In a rough economy, some of these pre-foreclosures may also be short sales. Finding short sales that aren’t in pre-foreclosure is more difficult because not everyone who’s underwater is looking to sell. In fact, unless they absolutely must move, it’s probably in their best interest to wait until the market shifts and they’re in the black again.
Tips for Working with Homeowners Facing Foreclosure
- Put their best interests first. Don’t force a listing when a sale isn’t the homeowner’s best option.
- Be empathetic. This is a tough position for homeowners to be in. Don’t make them feel guilty, embarrassed, or anything but hopeful.
- Get in touch with the lender immediately. They need to know if the owner wants to avoid foreclosure by catching up on payments or selling.
10. Banks
When a property is foreclosed on, it becomes an REO (real estate owned) asset. This means the bank owns the property. And, generally speaking, banks do not want to own residential property. They don’t have the staff or systems to manage rental properties. So they want to sell these properties as quickly as possible. And they want a reliable agent who can get the job done quickly and efficiently.
This is among the most specialized real estate niches because it requires working with institutions rather than individuals. You’ll need to learn to work within their system to be successful.
How to Market to Banks
You need an in with an asset manager. Asset managers are typically the parties responsible for overseeing the disposal of REO assets. Start networking online with AMs. Treat a few local AMs to lunch to discuss the market in general and their specific needs.
Ask for a trial listing. Do a good job, and you might get future listings from that AM. They might even refer you to other AMs until your business is all passive AM referrals!
Tips for Working with Banks
- The easier you make life for the asset manager, the more likely you are to get repeat business and referrals.
- Take the time to understand any legal or organizational restraints for these sales.
- These properties will be vacant and could be in rough condition. But the banks are highly unlikely to invest in staging or repairs. You may want to consider investing in a cleaning and virtual staging out-of-pocket (in the same way you would invest in professional listing photos and a professionally written listing description).
Which of These Real Estate Niches is Right for You?
Choosing a real estate specialty comes down to a few key factors:
- Your local market demographics,
- Your local market conditions, and
- What you enjoy.
Commit to your chosen niche for at least a year to give yourself time to establish your brand in the niche. Within a few years, you could be locally known as the go-to agent for your niche, collecting an impressive market share of those buyers and sellers!
