Recognizing when certain real estate industry trends are coming to an end may present lucrative niche segment opportunities for growth. This is particularly the case if you have a solid idea where your targeted market is heading. One niche market to consider may include working with military and veterans personnel.
The case for the military niche begins with a vast population of potential buyers and sellers. There 22 million veterans in America and almost 1.5 million active duty military personnel, according to data presented in a Nov. 11 press release issued by the National Association of Realtors (NAR). Military buyers are also eligible for attractive mortgage packages offered by the Department of Veterans Affairs’ home loan program, which features zero-down payment loans and boast one of the lowest default rates in the country.
The knocks on addressing the military niche are abundant and have been so for some time. However, this is one of the things a forward-thinking and savvy broker should be looking for—an underserved market that is ripe for recovery under the right circumstances, many of which can be driven by real estate professionals who want to serve this unique market.
Military Market Challenges:
To be sure, military members have trended away from buying homes over the last several years, according to a Feb. 24 news report published by The Virginia-Pilot. The report in part validates this national trend by referencing local activity in the State of Virginia where homeownership by military members has decreased from 54% in 2005 to about 41 percent in 2011.
Another ongoing area of concern is the transient nature of military families who may be relocated with very little time to manage the home-selling process. This has particularly been the case for the last several years where unfavorable economic conditions forced many military homeowners to list their homes for much less than paid cost.
Use the Market to Your Favor:
One perk to current economic conditions is that inventory is near its 30-year lows in many U.S. markets. Interest rates continue to be outstanding on the commercial market and even better when properties are financed through a VA Loan offered exclusively to military personnel.
Furthermore, the rental market continues to be sensationally-hot throughout the U.S., particularly in areas where families are routinely coming and going. That can be a selling point to any military or veteran homebuyer. Do this by including a rental marketing plan for military families who will likely be moved within two or three years. Demonstrate to buyers up front how monthly rental income will cover the costs of mortgage and ongoing maintenance expenses.
This is hardly a ground-breaking new business model; however, it can still be highly-effective when military personnel purchase a home for the right price! In this capacity real estate agents can function as much more than an agent to a home; rather, they can also serve as a trusted business advisor that helps honorable and forward-thinking military families invest in their long-term financial futures.
Three Things to Get Started:
Market Viability—do your research and make sure there is a market for military home buyers and sellers in the communities you serve. For example, if there is a large population of military and veteran personnel in the communities you serve and housing prices are on the rise, then you may have very good reason to begin addressing this niche. But it is also important to remember that veterans are everywhere.
Become a Military Expert—in addition to knowing your market inside and out, you must understand and respect the nuances of military families. What influences home buying vs. renting decisions? What can military personnel afford to buy? What do they pay to rent? What local, state and federal benefits exist? What is your plan for managing or selling a property if a family gets moved? NAR’s Military Relocation Professional program is a great way for a REALTOR® to gain education that qualifies them to address the military niche.
Build your Network—establishing relations with local military relocation officials and positioning your skills as value-added expertise will be critical to long-term success. Seek referrals from pleased customers and attend local military events for starters. In short, show you understand and care about the unique challenges your customers face and can be a visionary and expert resource rather than just an order taker.
The military niche is not for every agent. However, those who can focus on the serving the needs of military now will be positioned to be leaders in their markets when this trend becomes the one your peers are talking about, if they aren’t already doing so.
Do you have experience working with the military market? Please share your thoughts and expertise on how to build and address