How to Do Market Research for Real Estate

How to Do Market Research for Real Estate – What is Market Research? Don’t you just mean checking the prices? -No! Market research is more than just looking at the asking price of properties! It’s about finding out what buyers are looking for, who might be selling properties in the near future, and how pricing works.

This book is written in an informative and entertaining way to explain how market study can help you make money. We explain how it is used by real estate investors. You will learn about types of research, how to interpret research data, and much more.

Conducting real estate market research is a considerably different feat than conducting any other kind of market research. This is because this vertical, by its very nature, is packed with market intelligence that can be applied not simply to real estate companies, but to buyers and agents, along with those looking for a new property.

Therefore, as a business, you’ll find a lot of overlap between business-facing research and research that the target market can stand to study. However, even when you come across information that seems more suitable for consumers to review, it is of high value to your business as well.

Why? Because it is crucial to tap into the minds of your target market, to see exactly what they’re presented with. This intel will also grant you comparisons between your own offerings and those in the real estate market.

Table of Contents

The Main Uses of Real Estate Market Research

Research for the real estate vertical can be used for a variety of purposes. The chief goal of market research for this industry is to discover if your business will be successful in a particular location.

Unlike other industries, real estate has an enormous focus on location and the brick and mortar aspect. It is self-explanatory as to why that is, nonetheless, getting a deep understanding of your target market is also essential.

Here are the key uses of market research for this sector:

To understand changes and trends in the real estate market at large
To understand the current housing/ space rental markets
To compare prices of similar properties with yours
To be informed on how much you can charge for rent (particularly for investment properties)
To gauge your own prices as reasonable, too high or too low
To be able to market your properties successfully (gain better reach, prospects and sales)
To choose the proper investments

How to Conduct Real Estate Market Research

Narrow down a region/neighborhood

Since real-estate is location-based, you must first settle on a region or a neighborhood you are interested in serving. If you are undecided, consider a few areas that you’d like to learn more about.

Identify the target market of your neighborhood. You can do so via secondary research, by finding the demographics of your intended neighborhood. There are several sources that fetch this data, including Neighborhood Scout, Census demographics data, for example for New York City and Movoto.

Aside from gleaning the target market, these tools gather other key info like crime, local schools and even real estate data.

Observe Your Desired Neighborhoods

Aside from looking at your direct competitors in the particular neighborhoods you set your sights on, you should also look into each neighborhood’s supply. This refers to the number of properties currently on offer in the neighborhoods. ALSO READ: Real Estate Market Analysis Example

Then, you’ll need to find how in-demand a particular neighborhood is. To find this, you’ll have to survey your target market, or even the broader market of consumers seeking to find a residence or space to move into.

If you survey your target market, you can get their opinions about moving into a neighborhood. The more responders who prefer a neighborhood, the more expensive its properties become. In short, demand dictates the competition of a region.

As part of your neighborhood observation, peruse several listings of the available properties, office space, apartments, or whichever real estate is most relevant to you. Pay attention to the prices in particular and compare them with your existing ones, or the ones you set out to charge.

This will give you a real-world view of pricing and pricing expectations of your target market.

Gauge how the neighborhood has been faring

After you examine the physical characteristics, you should get a deep read of how the neighborhood has been faring. This includes delving into the economics, construction and business performance of the region.

When developments are underway, they could impact a neighborhood’s properties. At times, they may incite new companies to arrive in the region. Some may impact the local economy positively, while others may worsen it.

An uptick in commercial real estate is usually a sign of a healthy local economy. This will stoke the interest of buyers and with more sales, the cost per property square foot will be on the rise.

Research the demographics of the neighborhood. This will allow you to be clued in to the target market as well as giving your buyers more insights. An elderly population, for example, is great to highlight to retirees and others within this age range.

But perhaps younger buyers are seeking a neighborhood with other young professionals.

Moreover, age and ethnicity are not enough to determine how a neighborhood will fare — and neither how your business will either. You’ll need to understand your target market at a deeper level.

That is where surveys rear their usefulness again. A survey with the right questions will give you all the answers you need to understand how to best appeal to your target market. It can also give you more insight as to the price and style of real estate your consumers are seeking.

Analyze the physical elements of a neighborhood/property

Analyzing the properties of a neighborhood and the real estate you seek to sell requires not merely examining the physical properties of a home. Rather it also involves inspecting public utilities and services, along with general environmental aspects.

Here are the most pressing aspects to inspect that affect a property’s standing:

Water resources
Soil
Transportation in the area
Regional climate
Utilities offered and their functionality

Afterward, you will need to inspect the property itself.

Size and square footage
Number of rooms (bedrooms, bathrooms, other rooms)
Age of properties (newer buildings tend to have a higher value)
Amenities (decks, fireplaces, gardens, balconies, etc.)
ANy recent or noteworthy improvements/ restorations

Study Your Competition

Once you have narrowed down a few neighborhoods to research, along with their respective target markets, it’s time to focus on the competition.ALSO READ: Free Tools for Realtors

That means looking further into secondary sources. To do so, check for websites that provide real estate agent, vendor, supplier information in specific localities. BiggerPockets and Parkbench neighborhood marketing platform, for example, provide information on local real estate agents and vendors.

As for a neighborhood itself, look into The Federal Housing Finance Agency (FHFA). This website provides data on recently sold properties in specified areas.

You can also check The FNC Residential Price Index. This platform features exhaustive and up-to-date data on the real estate market from public records and valuations. This index also shines a light on market trends.

Real Estate Marketing Strategies to Expand Your Business

Identify the target market

This is probably the number one strategy that you can use to become truly successful as a real estate agent.

Many real estate brokers and businesses focus on a niche market and become an expert in that market. This gives you an idea about what’s driving the target market currently, what risks are involved, and most importantly where the market is headed in the short and long term.

For example, a real estate broker who knows the details about a new transportation or school project coming locally could change his marketing strategies accordingly.

Additional resources to help you identify your target market:

Budget for marketing expenses

Another major factor in successfully expanding your real estate business is to develop a marketing budget and stick to it.

There are literally hundreds of avenues to spend your marketing dollars on, such as real estate websites, email marketing, social media marketing, and postal marketing.

Your spend must be based on your target audience. For example, customers in the San Francisco bay area might require internet-based marketing, whereas customers in a rural area might require a different approach.

Additional resources to consult for marketing-related activities:

Create a website and use social media

Regardless of the market, you must establish your presence on the internet with the help of a professional website, as well as dedicated accounts on social media sites such as Facebook, Twitter, and LinkedIn. These are relatively inexpensive, with the potential for huge outreach.

You can also market your business on search engines such as Google and Bing, by paying for ad campaigns.

Additional resources to consult for social and internet activities:

Encourage referrals and word-of-mouth

Most successful real estate agents generate several deals through referrals from previous customers. A customer referral is most valued by a new buyer or seller.

For example, new customers are more comfortable selecting a real estate agent when referred by a friend, colleague, or relative. You can always boost this approach by offering referral bonuses to the person who refers a new customer.

Respond quickly

We live in a world that is moving at a much faster pace than ever before. It is very important to respond to customer queries or else you will risk losing new business.ALSO READ: Real Estate Market Analysis 2020

You must have access to email via a smartphone at all times and ensure that you respond to a customer request as soon as possible. You cannot wait to respond until the next day in this business. If you are prompt in responding, it adds to your credibility and reputation.

Publish a real estate newsletter

If you are serious about your long-term success, then you may consider publishing a weekly or monthly newsletter with updates on current mortgage rates, changes in real estate laws, benefits of homeownership, how to develop a real estate investment portfolio, health checks on the local market, and so on.

All current and prospective customers would appreciate the insights from such a newsletter, as it shows your knowledge and commitment to the business.

Dispel questions on the need for a real estate agent

Disintermediation refers to the mindset where customers wonder whether they really need a real estate agent or not. Disintermediation marketing targets such customers to convince them of the value offered by a real estate professional.

You can educate the customers via your website or marketing channels on the need for a real estate agent and lawyer during the sales or purchase of a house or piece of land.

Plan for success

Regardless of whether you are a real estate agent or a real estate developer, you will need a real estate development business plan. This will set you up for success. You can plan your expenses, contingencies, and other risks with the help of a real estate development business plan.

Many people fail when they work in a vacuum without such planning. For example, you can plan your budget for next year’s real estate marketing strategies with the help of a well-documented business plan.

Additional resources to help you write a business plan:

Develop brand awareness

Just like big brand businesses, your real estate business must also strive to develop a brand of its own. It could be under your name or your business’s name. Any real estate sales strategy that you apply must keep this concept in mind.

People often wonder how to get into real estate sales and how to successfully build a business. The answer lies in planning to develop a name brand and using it to market the business for years to come.

Additional resources to help you with branding your business:

Developing a successful real estate business takes effort and time. The strategies listed in this article are worth your effort if followed carefully and diligently.

Success does not come from random acts of work without planning; instead, it comes from developing and following a plan.

Conclusion

You’ve got a great real estate idea. So now what? You need to do some research. This book is the perfect tool for you if you have a great idea, but don’t know how to do market research for real estate.

0 0 votes

Article Rating