The vast majority of real estate agents work with three major property types. It's no coincidence that these are the three property types accounting for most of the real estate ownership transfers. As a new agent or broker, you may want to narrow your focus and specialize in one or more property types. A study of the number of properties of each type in your area, and their relative values, would indicate the possible financial rewards of working with each type.
Niche marketing in today's online world has changed niche decisions a bit though. While in the past an agent might specialize in just farms and ranches, the Internet has made it possible to effectively market in more than one niche and also in niches not related to property type.
Now it's much more common to see agents specializing in the Baby Boomer niche or the millennial niche. Even more interesting is the agent working multiple niche markets successfully.
Farm and ranch specialists have long been quite successful in this business. Generally the property size and price is quite large, with corresponding commissions. Be sure you understand the specific buying requirements and motivations of your prospect.
In rapidly growing areas, specializing in building lots for properties can be lucrative for an agent. Just know that, as long as the spread continues, the area you have to cover will get farther out from the city and possibly your office.
Vacant land in some areas actually commands a higher commission percentage, but that is becoming less frequent now. Higher land commissions probably came about at first due to the lower selling prices, so commissions were adjusted higher to get to a minimum. Now that land is more expensive, there are fewer areas where commissions are higher.
On higher priced land, there are few validations for higher commissions. The listing and transaction process is actually significantly simpler for the agents. There are no structural inspections, floor plans, insurance issues, etc.
By a large margin, the most widely practiced property type niche is residential. Whether single family homes or townhomes, most agents start in this niche. Most stay in it as well, as they can do quite well income-wise.
There are even sub-niches, mostly based on price ranges. Like multi-generational properties. Some agents only work with luxury properties with high dollar prices, while others work in the less expensive entry level home markets. The trick is to do what you like and what holds your interest. You're going to deliver better customer service if you're excited about your niche and especially if you make an effort to be an expert.
Commercial property can be empty land zoned for commercial use, or an existing business building or buildings.Commercial property valuation requires a more complex method, taking into account the income potential of the property, historical revenue, cash flow with owner perks removed and much more. Unless someone has extensive business valuation experience, it's better to enter this specialization carefully after time in the business in land or residential property markets.
For this discussion, commercial includes multi-family and apartments in commercial. That's because lenders, buyers and sellers use different methods of valuation and qualifying for funding is handled much differently than in normal residential.
As far as office buildings, supermarkets, shopping malls, industrial, gas stations and other commercial property types, it's a more complex business, but incomes are better if you're good at it. Sub-niches, such as only working with strip malls and shopping centers are also common.