Niche Identification for Apartment & Multifamily Properties http://karenhanover.com/ In business, fortunes have been made by locating a niche demand for a product or service and filling that niche. Zappos began by selling shoes on the Web. Shoe stores are everywhere, but Zappos concentrated on broad selection of size, style and brand with fast delivery and liberal return policies. Now, this Web store has grown into other products, including clothing lines. But, the key is that a niche was identified, and Zappos attacked that niche with marketing specific to the demand. Apartment & Multifamily properties, though a bit different in the nature of the product, can fill a local rental demand niche. There are a number of characteristics of a market or property that create niches, and they can be very different by market and local economy. The first task is more global in nature, but still important; why people rent apartments. This isn't niche identification, but it can guide the apartment & multifamily investor in the identification of one or more niche characteristics of their property. Temporarily in the Area Americans have become more mobile, and the average ownership period for a home has gradually decreased over time. People don't make the “live here forever” decision that was common 20 years ago. Temporary can also mean just not ready to buy, and leaving options open for a move. It can also be due to a lack of job security. Lack of Down Payment or Credit Score to Buy There are a great many renters in this situation. Some have been through a foreclosure, while others never made it to the first purchase of a home. The mortgage and home price problems of 2007 through 2010 have taken their toll on credit scores and cash savings. Part of niche identification is knowing roughly in which of these large groupings the local renters fall, and it could be a bit of both. Then, a narrowing of the things these renters want, their “hot buttons,” can do the rest.
Displaced by foreclosure, renters desirous of apartments sized for their families to lessen the impact of the forced move. Young professionals desirous of modern “party-friendly” properties and units. Same young professionals wanting to be close to a large employer. More transient renters wanting short leases or month-to-month. Luxury or “executive” apartment renters, some on temporary assignment. College students Low rent tenants, maybe wanting some utilities paid.
Whatever it is, location, amenities, size or other, there is some niche into which an apartment or multifamily property falls; perhaps more than one. Niche Identification for Apartment & Multifamily Properties, Copyright 2010 by http://karenhanover.com/