Market Segmentation
The term market segmentation is mostly used in marketing for assembling prospective buyers in groups based on their needs and their response to a marketing action. One definition of market segmentation is the market’s division into subsets of customers to simplify targeted branding and marketing strategies. When you know who you are trying to attract, you know what they are interested in, it’s easier to approach them.
What is Market Segmentation in Real Estate?
Real estate market segmentation allows real estate companies, investors, and brokers to target specific groups of buyers who would get the biggest benefit from a type of property. The purpose of market segmentation in real estate is to identify and target specific groups of buyers to offer them real estate that was tailored or branded precisely for their needs.
Market segmentation for real estate can be done based on different factors like the type of property (residential or commercial), demographics (millennials or baby boomers), geographical location (one city or state versus another). Based on the type of market segmentation applied and the reason for which it was applied, it can be used in different ways.
Examples of Real Estate Market Segmentation
Real estate agents use market segmentation to find their niche based on the types of buyers or sellers. They can also use it to improve their business depending on the client they work with, the buyer or the seller. Applying market segmentation to their strategy helps them improve their brand and communication towards their targeted audience.
Investors and real estate developers look at market segmentation to evaluate performances. For instance, during economic strife, some segments of the market might be more profitable than others. The commercial real estate market might not be as affected by an economic downturn as the residential market. Similarly, the rental market might drop while the homeowners market skyrockets. In some cities, single-family homes might be more profitable than high-rise apartment complexes or vice versa. Being able to determine this through market segmentation helps investors and developers supply a growing demand while also increasing their revenue.
Popular Real Estate Terms
Legal rule, principle, or tenet. ...
Word, or group of words, that identifies a business or one of its products. The name is registered with U.S. Patent Office and provides legal protection for an indefinite number of renewals ...
Pitched roof that looks like a saw. ...
Federal program in which the U.S. government subsidizes much of the rent paid by low-income people. It applies to rentals of privately owned apartments. ...
Deterioration in property resulting from its ordinary use and from the aging process. An examples an apartment building that physically deteriorates over the years. ...
An income feature added to a mortgage whereby the mortgagee earns income in addition to the mortgage interest and principal payments. Also called an equity kicker, a kicker allows the ...
State laws limiting the interest rate that can be charged to individuals borrowing money in that state. These laws affect all lenders in a state regardless of what federal or state agency ...
Insurance coverage provided for an individual having a lease at a favorable rate, one which is less than the market value of the property. The insurance indemnifies the tenant for business ...
State tax based on the value of property received through inheritance. The tax is paid by the recipient not the estate. Tax paid to the government or state upon the death of the taxpayer ...
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