I recently had a consulting call with a new agent. During the call, the agent asked a pretty good question that I thought I would share. His question was…
“If You Started in Real Estate Today, What Niche Would You Go After?”
Apparently my answer was not what he expected. Here was my reply…
“Where is the money at in your housing market?”
I’m sorry, I couldn’t resist adding this video! Back to this new agent…
He didn’t have a great answer to this question. Selling real estate is just like any other business. You have to pay attention to the numbers. What homes are selling? Where is buyer demand? Where can you generate the most income with the least amount of work? These answers differ from market to market and change over time with the peaks and valleys of the real estate market.
Historically, investors have been a great niche to focus on for several reasons. Investors typically buy multiple properties providing recurring sales with no additional marketing. In addition, the investor niche opens up the doors for many back end business opportunities including tenant placement and property management.
However, today investment properties are pretty challenging to specialize in and the reason is because the commission income per sale is typically not worth the amount of time you have to invest to close a sale. Most of the homes in our area have dropped significantly in value and require a great deal of work to close. Sure, you can charge the investor a higher commission or flat fee, but if the deal doesn’t close you still lose out. And sadly, many of these investor deals are not closing for various reasons.
My entire “Less Clients More Money” System for real estate agents was engineered to make more money from each client. The idea is to design your business so that you maximize your income from every single client. Make more while working less.
As an example, if you were looking to become a waiter or waitress at a restaurant in your area, what would be a better choice for you: Denny’s or Morton’s Steakhouse? At Denny’s you’ll have more tables to service, but this higher volume is offset by lower tips. On the flip side, at Morton’s Steakhouse you’ll have fewer tables to service, but you would make a great deal more in tips from each table. It would make more sense to become the best waiter or waitress at a higher end restaurant, because you’ll make more with less work.
If I were starting out in today’s real estate market, I would specialize in higher priced homes. Home prices for larger homes are very attractive right now and interest rates are so low that these larger homes have become very affordable. In fact, I just wrote a new lead generation advertisement highlighting a beautiful 4 bedroom, three and a half bath home sitting on a golf course that could be purchased for $1,800 a month with just 5% down. This home isn’t my listing, but is being used as a lead generation tool for another agent. (My Master Marketer Club members will get this advertisement next week.)
From a marketing perspective this situation (low prices and low rates) gives us multiple opportunities for lead generation and lead conversion and I would focus my time and attention today on larger, higher priced homes. The reason why is because I believe it will be easier to generate and convert quality leads and you’ll make more money with less work.
I sent this new agent my Automatic Showings Report and System and suggested he use it to generate and convert higher priced home buyers in his business. The reason I sent this to him was because I included several lead generation and lead conversion systems for higher priced homes. If you would like to learn how to set buyer home showing appointments automatically, watch the video at: AutomaticShowings.com
Additional Reading:
How to Follow the Money In Your Real Estate Business
My Secret Market Domination Strategy (Can be used for any niche)
