Breaking Down Niche Economics: How, What, Where, and When

In my post, "Are you Cutting off your Niche to Spite your Marketplace?" I wrote about why real estate professionals should choose a niche. In listening to the readership community of this blog I heard a need for clarification of the infamous 3 W's and H.  My marketing mind is ready to serve so here we go.

 

 

Breaking Down Niche Economics:  How, What, Where, and When

 

HOW?

Get back to basics.  Study and research your market area. You need to understand what your marketplace is doing- What is selling? What's not? Who makes up your marketplace?

I recommend that you read and print this post by Myrtle Beach Real Estate agent Mirela Monte, "How Well Do You Know Your Market". It is a timeless post that captures the essence of what homework you should be doing everyday in order to understand your market.

Mirela wrote this post in October 2008 so you can adjust the time frames accordingly and put it to use, daily, weekly, monthly and quarterly.
 

Once you understand your market you will be able to analyze its trends and find your niche.

 

 

WHAT?

You've done your homework and research but are unsure if what you've determined could qualify as a niche.  You might just be surprised at what a niche can be---take a look at these niche markets,

 

 

 

1. Fixer uppers
2. Lakeside property
3. Pet owners
4. Green living/Ecobroker
5. Neighborhood expert
6. School District expert
   
7. Vacant land/acreage
8. First time home buyers
9. Seasonal visitors
10. Equestrian property
11. Resort/vacation homes
12. Seniors
13. Luxury Homes
14. Condo buyers/sellers
15. FSBO's
16. Expireds
17. Short Sales- which can be subdivided into families, divorcees, young singles, investors, move-up families, home finding services and road to recovery services for short sale homeowners
    
18. REO's
19. New Construction
20. Relocation....which can be subdivided into International, Domestic, Young Urban Professionals
21. Families.....which can be subdivided into families with young children, families with teenagers, families with college children, families with elderly parents living with them, single parents
    
22. Empty Nesters
23. Investors...which can be subdivided into condos, single family homes, commercial,
    
24. Nudists
25. Military Families....which can be subdivided into army, navy, coast guard....which can also be subdivided into rentals, temporary housing, homebuying/selling, property management
26. Minorities- Asians, African Americans, Hispanics
27. Car Enthusiasts
28. Gay and Lesbian Community
29. Universities/alumnists
30. Houseboats
31. Oceanfront
32. Rental Assistance
33. Farms/Acreage
34. Timeshares
35. Mobile Homes
36. Historical Properties
37. Bed and Breakfasts
38. Property Management
39. Business Opportunities
40. Celebrities
41. Actors
42. Musicians
43. Sports Professionals
44. Service professionals- i.e. doctors/lawyers
    

 

How can you tell if the niche you have chosen is truly the golden nugget of your local real estate market?  Ask yourself a few questions once you have decided on your metallic endeavor,

 

1. DEMAND-Is there a need for this niche?
2. PASSION- Do you have a desire to serve this niche?
3. FINANCIAL OPPORTUNITY- Can you make enough money from serving this niche?
4. SUPPLY (over/under)- Is this market currently flooded with service providers or are you an early adopter?
5. EXPENSE- Can you cost effectively market and sell to this niche?

Bingo...You hit the jackpot:  If you answered yes to all 5 it's time to do some planning. 

Answer Key

• If you answered yes to all but #1 you need to go back to your market research and studies because you missed something in your initial analysis if you answered no to this question.
• If you answered yes to all but #2 go back to the drawing board because if you don't like what you are doing you won't be attaining the quality of life you desire.
• If you answered yes to all but #3, maybe you need to supplement your income by adding another niche. 
• If your answer to #4 is that your market is flooded you will need to differentiate in your service offering to have any chance of being effective.
• If you answered yes to all but #5 you will need to supplement your business with another source of income, either a part-time job or another niche, while you are building your first niche out.

 

 

WHERE?

Back to the basics again. You need to devise a strategic marketing plan. If you don't get help in constructing this then I'll give you a few DIY pointers:

1. Where does your niche go offline?
2. Where does your niche go online?
3. What businesses does your niche buy products and services from...where are they...how do you get in front of them?

Make a list, make a plan, and follow through.

 

 

WHEN?

If you are committed to running a business the time is now.  If you enjoy throwing spaghetti against the wall to see if anything will stick, the time is never.  Investing in a niche today is investing in money today, tomorrow and building for an exit strategy in the future.  If you decide today to make that investment I say to you....

Congratulations on your decision to become a successful business owner.