Niches pay big bucks. Just think about the specialized professionals who make the most money like medical surgeons, dentists, technicians, engineers, and contractors. Real estate investing niches work the same way. The more you specialize in niches, the better you do financially.
In the rest of this article, I will share 35 of the best niches for real estate investing. And most importantly I want to help you choose the right one for you.
Let’s get started!
Niches vs Strategies
When you first begin real estate investing, you’ll need to make two big decisions:
- Your real estate investment strategy
- Your real estate investment niche
I see wealth building sort of like climbing a mountain. The peak is your financial goal, and your strategy is the route you choose to climb up. Strategies include things like fixing-and-flipping houses, holding rentals, wholesaling deals, and investing in private mortgages. They are your specific plans to make money.
If you want to learn more, I wrote an entire article about the best real estate investing strategy.
Niches, on the other hand, are like the vehicle that takes you up the mountain. You could walk up, ride on a horse, fly a helicopter, or use an airplane and parachute in. They all have their pluses and minuses. But each vehicle can potentially get you to the top.
Real estate investing niches work the same way.
Don’t feel like you have to know or like all of the 35 different niches below. The opposite is true. I’m including a long list of choices so that you will know your options. But then you should narrow down your choices to the best 1 to 3 niches that fit your situation and your market. And if you want to add more niches or switch to a different one later, that’s fine too.
To make the 35 niches easier to remember, I’ve separated them into four different categories:
1. Property niches
2. Seller niches
3. End-user niches
4. Location niches
Category #1 – Property Niches
The most obvious way to specialize in real estate investing is by property type. Below are the most popular types of investment property.
Keep in mind that authors write entire books on just one of these niches alone! So, if one property type interests you, make a point to study it in more depth.
1. Single Family Houses
Single family houses exist on their own lot, and builders construct them on site (unlike manufactured homes built in a factory). According to the United States Census Bureau, single family houses make up 60% of all housing in the United States. Because houses are so plentiful and popular, they are still one of the best real estate investing niches.
Certain high-priced markets may not work financially for house rentals. But don’t assume that’s always the case. Look hard in working-class neighborhoods, and go to less trendy neighborhoods just outside of the popular areas. The prices are usually more affordable there. Also get neighborhood advice from local real estate agents and property managers.
- Building Wealth One House at a Time by John Schaub – Links to my book summary about the benefit of single family house investing.
- Is It Better to Invest in Single Family or Multifamily Rental Properties? article by Mark Ferguson
Duplexes (2 units), triplexes (3 units), and quads (4 units) are like hybrids. They are similar to houses because they occupy their own residential lot. But they are similar to apartments buildings because they produce higher rental incomes with lower relative expenses.
Duplexes, triplexes, and quads also benefit from favorable financing. Conventional lenders usually only offer low, fixed interest rates for 30 years on properties with 4 units or less.
- Straight Talk on Investing in Small Multifamily Properties, article by Erion Shehaj
- Case Study: Small Multifamily Investments in a Growing Texas Market, article by Erion Shehaj
- Investing in Duplexes, Triplexes, and Quads: The Fastest Way to Real Estate Wealth, book by Larry Loftis
3. Small Apartment Buildings
Definitions differ for this niche, but it’s typically between 5 to 100 units. These buildings are usually too small for the big national apartment investors to mess with. But they are too big for the small, mom-and-pop type of investors. So, they represent a very interesting niche for investors willing to pursue them. Financing for these typically comes from commercial lenders, like local banks.
- How a Small Apartment Building Made Me $40,000/Yr (Video), article and video by Michael Blank
- Multifamily Millions, book by David Lindahl
4. Large Apartment Buildings
Large apartment buildings, which we’ll define as any building over 100 units, have many advantages. The larger a building, the more economies of scale exist. This means you have income from many units to pay for one roof, one parking lot, one crawl space, one property manager, one maintenance contractor, etc. You also have the benefit of multiplied cash flow from many units. Because the price points are higher, investors typically finance these properties with a combination of commercial loans and capital from partnerships. REITS (Real Estate Investment Trusts) and other large syndications also focus more on this property type.
- How We Bought a 24-Unit Apartment Building for (Almost) No Money Down, short book by Brandon Turner
- 5 Reasons Bigger is Better With Apartment Building Investing – article by Michael Blank on BiggerPockets.com
5. Condos and Townhomes
Condos and townhomes are individual units that are part of a larger complex of units. Because condos are more affordable to build, they may be the only affordable investment property available in high-priced markets. As with all niches, you must study the potential pitfalls of condo and townhouse investing. Particularly with condos, you should perform another level of due diligence on the condo association to study its regulations and to ensure its financial health.
- Sustainable Real Estate Investing 101 – This guest post on my site is from an investor who achieved financial independence with small investment condos in urban areas.
- The Details of My Rental Property, detailed condo rental explanation with numbers by RetireBeforeDad.com
- What Can Go Wrong Buying Condo Rentals, article by RetireBeforeDad.com
- The Rental Condo Cashflow, article by Joe at Retireby40.com
6. Mobile Homes on Land
Mobile homes (aka manufactured homes) are built in a factory and transported to a piece of land. The manufacturer can typically build and transport them for less than the cost of a home built on-site. These cost savings and fast price depreciation (like cars) give investors lower purchase prices and higher cash flow from rentals.
This particular niche includes homes on lots, not in parks. And they come in two varieties: single wides and double wides. Single wides are usually less than 18′ wide so they can be transported in one piece to a site. Double wides are usually 20′ wide or more (and often over 2,000 square feet), which means they must be transported in pieces.
Financing for mobile homes is not impossible, but it’s much more limited than with site-constructed buildings. So, count on paying cash or using creative financing to buy these properties.
- Why Invest in a Mobile Homes With Land Over Typical Single Family Homes, by Aaron Kinney on BiggerPockets.com
- Investing in Mobile Homes, guest post by Rachel Hernandez on WhiteCoastInvestor.com
7. Mobile Home Parks
Mobile home parks typically include multiple single wide mobile homes or RVs on one lot. Sometimes the investor owns the land and the homes, but other times the park owner simply leases spaces to individual owners of homes. This niche varies from tiny parks with several homes to enormous parks with hundreds of homes.
This can be a very profitable niche with extremely high cash on cash returns. But the management demand is often much higher for these properties. Solid business systems and an excellent team are a must.
- The Cold, Hard Lessons of Mobile Home U. , article by Gary Rivlin for the New York Times
- Mobile Homes & Mobile Home Parks Investing – Forums on BiggerPockets.com
- Deals on Wheels, by Lonnie Scruggs. This is the classic book on mobile home investing. Some of the financing strategies are dated because of federal law changes, but the principles and hilarious stories are worth the purchase.
- Adventures in Mobile Homes: How I Got Started in Mobile Home Investing and How You Can Too!, book by Rachel Hernandez
8. Commercial – Retail
Commercial retail investors own the buildings where we shop and eat at restaurants. For example, the corner drug store is not usually owned by Walgreens or CVS. Instead, an investor pays for the land and building construction, and the drug store company leases the entire property back for a long period of time (often 15-20 years or more). Investors in this niche normally use something called net leases, where the tenant pays the taxes, insurance, and maintenance.
The dynamics of commercial real estate are much different than residential properties, so be sure to do a lot of learning and get help before jumping into this niche.
- Singling Out Triple Net Leases, CCIM Institute
- Triple Net Lease Investing (NNN): The “No Toilet” Method to Real Estate Investing, article by Ankit Duggal on BiggerPockets.com
9. Commercial – Office
Commercial office investments are similar to retail, except the buildings are used for professional or other offices instead of retail. This niche ranges from the single tenant office building, like an insurance agent office, to large skyscrapers with offices expanding up into the clouds. REITS, funds, and other large syndications usually own the bigger commercial office properties. But the small properties are often owned by local, small investors and business operators (like an insurance agent or dentist).
- Commercial Real Estate Investing Forum – BiggerPockets.com
- Commercial Real Estate Investing With Frank Gallinelli – BiggerPockets Podcast #4
10. Commercial – Industrial
Commercial industrial investments house manufacturing and other industrial operations. These buildings can be enormous, covering hundreds of thousands of square feet. As you might imagine, this is a more specialized niche and not usually the entry point for new investors.
11. Commercial – Self-Storage
People like stuff and they need to store it somewhere. Self-storage rental complexes fill this enormous need. Many investors like this niche because there are no tenants living there to complain about toilet leaks or other problems. The building construction is also relatively simple (basically glorified garages), making repairs and maintenance easy. It’s also not the sexiest or most-well known of property investment types, so at times competition can be lower than other niches.
- How Humdrum Self-Storage Became The Hottest Way To Invest In Real Estate, Joshua Rogers, Forbes.com
- Self Storage Blueprint For Success, book by Scott Meyers
Real estate is not just the building or improvements. It’s also the land underneath. Many investors specialize in land investing, and there are smaller niches within this broader niche. The smaller niches include land development (either putting land together or sub-dividing into pieces), timber, agriculture, land leases, in-fill lots, and more.
I like land, but make sure you have a plan for how to get out before getting in. Land does not always produce regular rental income like other property types, so you have to have some cash and staying power in order to hold on to the land long enough to make a profit. The first link below discusses a very interesting angle of buying land and seller financing it for cash flow.
- 10 Rock-Solid Reasons You Should Be Investing In Land, article and video by Seth Williams
- Seeing the Forest For Its Hedges, Tim Gray, New York Times article about timber investments
13. Mineral, Air, and Other Property Rights
Did you know that you can not own the land or the building and STILL make money with real estate? Yep. Every piece of real estate includes a bundle of many rights, which include things like mineral rights under the earth (like right to dig for oil or gold), riparian rights (access and use of water), grazing rights for cattle, and even air rights. In New York City, for example, many smaller building owners sell their air rights (the ability to build above their current building) to other developers. Some investors specialize in owning, buying, and selling these rights.
14. Syndication/Private Partnership
This niche is not actually a property type itself, but it’s a way for a small or large group of people to invest together. The shared ownership could be of many of the other property niches already mentioned. As opposed to public REITs (the next niche), syndications are typically organized between private parties.
- How I Raised $5 Million to Buy an Apartment Complex in Two Weeks While On The Beach, article by Brian Burke, one of the most knowledgeable investors, syndicators, and bloggers on BiggerPockets.com
- Crowdfunding platforms like RealtyShares, Peer Street, and Fundrise have popped up recently to offer more opportunities for regular investors to enter this niche.
15. REITs (Real Estate Investment Trusts)
REITs are publicly traded entities very much like stock mutual funds. They own a larger, more diverse basket of properties in one or more of the property niches above. Many investors who want more liquid, passive, and diversified real estate investments choose this niche.
Category #2 – Seller Niches
Instead of specializing in a certain type of property, you could also choose a niche based on the source of your property purchase – the seller.
Seller niches represent situations in life that cause people to want to sell. I won’t be providing reading recommendations for these niches. But in the future on my newsletter, I will share more about these niches since I’ve used most of them myself.
Here are the property seller niches:
16. Preforeclosures/Short Sales
When property owners fall behind on their mortgage payments, eventually the lender begins legal action (aka foreclosure) to take back the property. The period between the payments falling behind and the actual foreclosure auction is called preforeclosure. This is a potentially profitable niche because typically the property owner is motivated to sell rather than face the hassle, risk, and embarrassment of a foreclosure.
The lender will also sometimes agree to a short sale, which means they will accept less than the full balance owed on the existing mortgage. Short sales work especially well if the lender is not a first mortgage (like a line of credit or other junior liens) because could lose their entire investment at the auction. Short sales also work if the property condition is bad enough to reduce the current market value below the loan balance.
17. Foreclosure Auctions
Although the process is different in every state or province, a foreclosure usually ends with an auction where a judge legally offers the property for sale. The public can bid at this auction, but the price is set by the lender to ensure it covers its loan and costs. If no one in the public bids high enough, the lender then becomes the owner. Some investors specialize in foreclosure auctions and purchase incredible deals. But there are many legal, title, and property pitfalls to watch out for, so definitely do your homework and get expert assistance.
18. Bank Owned/REO
This niche includes the properties owned by banks after a foreclosure auction. REO stands for “real estate owned,” the name for the section of a bank’s balance sheet where these properties are listed. Typically banks make money from interest on loans and not from real estate. So, they will often list the properties at more aggressive prices to sell them quickly. You’ll usually find these properties through special REO listing agents and on the MLS (multiple listing service). Although there are always bank owned properties, the strength of the niche is cyclical depending on how many properties banks have in inventory. You’ll want to also have a clear plan to finance REO properties so that you can move quickly when an opportunity arrises.
Bankruptcy is a legal process for individuals or businesses with financial difficulties. It allows them to either eliminate (Chapter 7 for individuals) or repay (Chapter 13 for individuals) their obligations using the protection of a federal bankruptcy court. This is a real estate investing niche because sometimes the individuals or businesses in bankruptcy need to sell their properties. Occasionally you can buy these bankruptcy properties at very attractive prices.
20. Burned Out Landlords
I have had a lot of success buying investment property from burned out landlords. Not all landlords enjoy owning property, particularly if they don’t study the business, assemble a solid team, or build good systems. If you catch landlords at the right time, like when they just had to evict an awful tenant who tore up their property, you can make a good deal.
People are born, and people die. That’s a fact of life. Another fact of life is that some people who die own real estate, and the heirs must decide what to do with it. Very often, the heirs decide to liquidate the property instead of keeping it. This presents an opportunity for investors because the heirs may be long distance and the property may need work in order to maximize its value. Offering the service of purchasing real estate from heirs can be a very profitable niche.
22. Fire or Water Damage
Damage from fire or water is a very traumatic event. Even assuming that no one is hurt, the clean-up, insurance claims, and reconstruction are very difficult for the owner of the property. If the owner failed to have insurance, the situation becomes even worse. They may be forced to sell at a drastic discount because no one can move into the property as-is. But even with insurance, some people choose not to rebuild and just sell the property. In either case, a real estate investor who knows how to solve these types of problems can create an interesting and profitable niche.
23. Code Violations
Most towns and municipalities have codes about the condition of the building and property within their borders. And the more proactive towns have staff members who enforce and give citations to owners who don’t fix these problems. As with all citations, these code violations should be public record. You as an investor can learn which properties have problems, and then you can offer to buy the property as a solution. This is a niche where you make a profit while solving a problem for the owner, the town staff, and the neighbors around the property.
Unfortunately, divorce is another one of those facts of life. And sometimes the result of a divorce is the liquidation of property. Some real estate investors specialize in purchasing properties from people needing to sell quickly without the publicity and hassle of listing it on the open market.
25. Tax Delinquencies
The top source of revenue for most local governments is property taxes. When property owners don’t pay their taxes, the local authorities don’t get their money. To solve this problem, the local governments collect the taxes through various delinquent tax processes.
In my state of South Carolina, for example, the process works like this. After 10 months the local tax collector auctions off your property. Investors at the auction purchase a tax lien. The property owner can redeem the property within 12 months, but he must pay 12% interest to the investor. If the owner does not pay for the redemption, the investor instead gets a tax deed to the property.
So, you either get interest or a deed (although it’s not always a clear, marketable title). Not bad alternatives!
Every state has a different procedure, but as a real estate investor, you can study the process and buy properties before, during, or after the auction. It can be a very profitable niche.
Category #3 – End-User Niches
End-users are the customers who really drive the real estate investing business. They are the tenants and buyers who live in investment properties. So, it makes sense to specialize in a niche that serves certain groups of customers.
But keep in mind that specialization in a niche is not the same as discrimination. Fair Housing Laws (and common decency) prohibit refusing a housing customer based on criteria such as race, religion, national origin, familial status, age, disability, handicap, or sex. You can make plenty of money while still treating people fairly.
Instead, these niches are about proactively buying properties and locations that will appeal to certain end users. Here are some ideas of end-user niches.
26. Long-term Rentals
This is one of my favorite niches. It’s all about purchasing rentals that attract quality tenants that stay for years (often 5-10 or more). The biggest rental expenses occur during turnovers between tenants. So, if you can build a niche of long-term rentals, you will minimize your expenses, save yourself a lot of hassle, and build more wealth over the long run.
There is not one single property type that fits this category. It will depend on your location. In my area, houses in good locations with lots of storage tend to attract the long-term renters. In some urban areas, a nice apartment within walking distance to a beautiful park and coffee shops might do the same thing. You’ll have to study your market to discover the opportunities in this niche.
- The book I referenced earlier, Building Wealth One House at a Time, focuses on this niche using single family houses.
27. Airbnb (Short-Term Rentals)
Short-term rentals have become very popular thanks to the popularity of website Airbnb. This niche fills the gap between hotels and long-term rentals. If an occupant wants to stay somewhere for a few days or as long as a month, Airbnb lets them stay in a home-like setting instead of a cramped hotel.
As an investor, Airbnb allows you to rent your home, basement, spare bedroom, garage apartment, yurt, boat, or any other creative residence. Short-term rentals may achieve higher rental rates than a long term rental. But on the downside, there is a lot more work and turnover in order to achieve this rent.
- A cool couple in Virginia, Ryanne and Jay, remodeled an old farmhouse, rent it out on AirBnB, and document how they make a living with AirBnB rentals.
- 10 Lessons I’ve Learned As an Airbnb Host, articles series by Paula Pant
28. Vacation Rentals
This niche has some crossover with AirBnB, but it is focused more on purely vacation areas like beaches, mountains, and other attractions. VRBO.com (vacation rental by owner) is the popular website in this space. I’m admittedly not a fan of vacation rental investing. I’ve seen numbers first hand on several occasions, and the actual numbers rarely look as rosy as the emotional appeal that got the investor hooked in the first place. But with that said, people certainly make money in every niche. So, if you’re interested, dig in and do your homework.
- An interesting Kiplinger article outlines some of the benefits and pitfalls of vacation homes as rentals.
- Trey Duling’s Biggerpockets.com blog articles offer an expert perspective from his experience as a vacation rental property manager.
29. Student Rentals
I know this niche very well as an investor in a college town myself. Basically, in this niche you focus on investing in college towns or parts of bigger cities where university students live. Like all niches, it has its positives and negatives.
On the positive side, enrollments tend to be steady or rising in most universities. This supplies a steady stream of tenants for your properties. And most tenants or their parents are credit worthy, so payment issues are rare. On the negative side, tenants move often (like every year or two), so there is a lot of turnover and related costs. The business is also more management intensive than long-term rentals because the tenants are not typically as self-reliant.
30. Section 8/Government Assistance
One of the programs funded by our federal and local governments are housing rent subsidies. These include the federal program, called Section 8, and other local programs administered by states and towns. These subsidies give qualified tenants vouchers that can be used to pay part or all of rent at privately owned rental properties. Obviously, this benefits rental owners because the government will pay its bills (unlike many tenants)! And depending upon the location, you could get a higher rent price compared with renting without vouchers (although the rent price must be justified in the market). Tenants also tend to stay longer because other good properties willing to accept vouchers are not easy to find. One of the primary challenges of subsidized rentals is dealing with the bureaucracy, paperwork, and annual inspections of the agency who pays the bills.
- Should You Rent to Section 8 Tenants, article by fellow blogger and investor Ben Leybovich that gives a good analysis of Section 8 investing.
- Lisa Phillips at affordablerealestateinvestments.com specializes in sub-30-thousand dollar houses that she rents to section 8 tenants.
31. Rent-to-Own and Seller Financing
This is the niche of turning renters into homeowners. There are many variations of this niche, and some are less than ethical when tenant-buyers are taken advantage of. But when done correctly this can be a wonderful way to sell your investment property with minimal expenses while also helping a renter who wants to become a homeowner.
In some cases, the tenant cashes you out with a new loan after 1-2 years. But you could also offer seller financing, receive a down payment, and collect principal and interest payments well into the future.
The paperwork and legal details of this niche are a little tricky. And that’s the biggest challenge. Before using lease options or seller financing, you should always consult with a local attorney knowledgeable about these contracts.
- Rent-to-Own Homes: How to Profit From a Lease Purchase, article by Brandon Turner explains how selling with lease options/lease purchase works.
- Federal laws such as the Dodd-Frank Act and the SAFE Act changed the landscape of seller financing. You can get good overviews here and here.
32. Special Needs Groups
This niche provides housing to various groups of individuals with disabilities. While also serving an important community need, the rentals can be profitable by renting separately by the bedroom instead of as one property.
I am not an expert in this niche, but it has piqued my curiosity. What I do know is that you will need to work directly with local non-profits who specialize in supporting the groups of individuals you intend to rent to. You will also have to consider specific modifications (like wider doorways, access to bathrooms, etc) depending upon your tenants.
Further Reading: This niche is not extremely well known, so you’ll have to piece together information.
- This WikiHow article shows how to start a group home.
- HERE is a page about the Federal 811 housing assistance program administered by HUD.
- And this discussion thread on BiggerPockets.com gave some good perspective on the niche.
Niche Category #3 – Location
Your real estate investing location is the final category of real estate investing niche. This is actually a MUCH bigger topic (see my comprehensive guide How to Pick the Ideal Location For Investment Properties or my YouTube playlist). But here I’ll list some of the top ways to focus or niche your real estate investing by location.
33. Region of the Country
Investing in different regions are not equally lucrative. You have to choose a general region that will make sense for investments. First, housing prices in expensive regions tend to outpace rents, so as a rental investor you will receive much lower cash flow as a percentage of your purchase price. Second, some regions have better long-term prospects than others economically. If the jobs and population are moving out of a region (like they did for decades in Detroit), you probably want to think twice before investing there.
- An Investor’s Guide to Population Research, an article by OB of outofstateinvestor.com that shares how to evaluate different markets around the country
- It’s All About the Ratios Baby – Why I Invest In Rentals from Thousands of Miles Away, article from Brian at rentalmindset.com that explains why rental/price ratios are so important.
- List of rent/price ratios in 76 US cities by SmartAsset.com
Even within a region that has good fundamentals for real estate investing, certain towns will be better than others. First, avoid overly restrictive local regulations and taxes. Some cities have restrictive rental laws, like rent controls, yearly inspections, and licenses. Others have extremely high property taxes compared to towns very close by. Second, look for municipalities with smart planning and public infrastructure investments. Smart local government affects long-term quality of life and real estate values. And finally, get on the ground and figure out the popular towns and amenities in an area. Often you can find an up and coming town not quite priced as highly as a similar one nearby.
- 4 Criteria to Help You Pick Local Real Estate Investment Neighborhoods, my 12-minute YouTube video
35. School District, Neighborhoods, & Amenities
Within every town, certain locations will be more popular than others. School districts, parks, greenways, public spaces, commercial centers, and other amenities can make locations more popular (and more profitable). Or in some cases, undesirable qualities like crime, traffic, smells from factories, or noise can make a location less popular. The only way to figure out for sure is by getting out on the street and becoming a customer. You study locations street by street, neighborhood by neighborhood to find the pockets of opportunity. I’ve found that the highest priced neighborhoods aren’t usually the best opportunity. Instead, you can buy in less popular neighborhoods nearby that have similar qualities. These nearby neighborhoods have better cash flow and tend to appreciate more rapidly.
- The free website Zillow.com and the companion book Zillow Talk are both very helpful when studying neighborhoods.
- Trulia.com offers great crime maps to study the safety of an area. Walkscore.com shows which neighborhoods are most walkable (and thus most attractive).
- Greatschools.org rates local schools, although it always pays to ask around locally to find out for sure.
How to Choose Your Real Estate Niche
We’ve just journeyed through a list of 35 potential real estate investing niches. Are you overwhelmed yet?!
Don’t worry. You don’t have to be.
Your choice of a niche will depend first of all on your unique circumstances, skills, and interests. But it will also depend on the market opportunities in the place and time you choose to invest.
To find your niche, I recommend the following approach, which I modeled after the hedgehog concept in the excellent business book Good to Great by Jim Collins.
Basically, you need to ask and answer three questions.
Which niche …
- interests and excites me?
- uses my existing skills, strengths, or expertise?
- meets a clear need in my target marketplace?
The following diagram explains the three questions visually:
It’s ok to start with just one of the three parts of the circle in the short run. But over the long run, you’ll also want to find a niche that allows you to match all three criteria.
For example, you may find a niche that uses your skills and makes money, but if it doesn’t excite you, I doubt you’ll stick with it. And this means you won’t be in the niche long enough to become an expert and to make good money.
Now that you have a framework to help you choose your niche, let’s look at an example.
Sample Real Estate Investing Niche
Let’s say you read my article on real estate strategies, and you decide to buy and hold rental properties. You plan to buy three properties and then use the rental debt snowball to own your properties free and clear.
You read all of the niches above and ask yourself the three questions:
Which niche …
- interests and excites me?
- uses my existing skills, strengths, or expertise?
- meets a clear need in my target marketplace?
You are excited about the idea of owning apartment buildings. But your market does not have a large inventory of quality apartments. And you also don’t have experience or expertise yet with that property type.
Instead, you decide on the small multi-family niche. You’ve spotted many older brick duplexes and triplexes during your drive through local neighborhoods. You also learned that these properties qualify for conventional financing with low-interest rates and long terms. And your good credit and stable job history will help you qualify for these loans.
You also decide to focus on a niche by location. Many of the rentals you spotted are near the popular new greenway walking and biking trail in town. You notice an opportunity because properties are a little run-down and ripe for remodeling and raising the rent. The prices are also not as high as the nearby, trendier neighborhoods.
This combination of niches – small multi-family properties and a location near the greenway – gives you a very specific focus for your real estate investing. All of the main parts of your real estate business, like financing, marketing, property management, and construction will become easier because of this choice.
For example, it would be very easy to generate a mailing list of owners for these properties. You could use a list building website like ListSource.com or MelissaData.com and then send letters to those owners asking to buy their property. You could also ask your real estate agent to monitor the MLS for similar properties in that location.
Your education and next steps will also be much clearer. And clarity breeds confidence and momentum for your entire real estate investing business.
Your Turn to Choose a Niche
The key to finding your niche is to stay flexible. Be willing to experiment. And just get started.
You won’t find the perfect niche right away, but the process of focusing will teach you more than you ever imagined.
I have personally switched my niches many times during my 14-year real estate investing career. But each time I refocused, I did better financially as a result.
I hope the tools, examples, and lists I’ve shared above will help you move forward. Now it’s your turn to take the ideas you’ve learned and translate them to your own real estate investing business.
If I can help with additional questions or clarifications, please leave them in the comments section below.
What niches make the most sense for you? Have you specialized in one or more of the niches I’ve listed and found success? Are there any niches I’ve missed?
I look forward to hearing from you!