In the property industry, some agents opt to specialize in a specific property type or on particular districts, while others prefer a broader and more general approach.
For someone new to building their real estate career, the question arises: which approach is more advantageous?
Should they specialize in a niche segment or adopt a more general approach?
Here are the key considerations:
The Main Differences Between Specialization And Generalization
Specialists in the property market tend to focus on a given area or property type. Examples include commercial property, landed properties, a given district, or resale flats. Generalists tend to take a more holistic approach, and market a wide range of properties.
There are pros and cons to both sides of this.
For a new property agent however, deciding which approach to take boils down to:
- Your existing knowledge and experiences
- The first few sales you close
- Whether you can survive greater volatility
- The nature of your colleagues and mentor
- Your marketing / prospecting methods
1. Your existing knowledge and experiences
If you already have prior knowledge or experience in a specific area, it makes sense to start from there.
For example, say your previous job was in mortgage loans, and you've already worked with a lot of private, non-landed (read: condo) buyers.
Chances are, you already know more about condo projects, their developers, and their buyers. You may even have existing contacts. It would make sense for you to start by focusing on this area, instead of trying to dive into, say, industrial properties.
Incidentally, unless you're a complete foreigner, there's no such thing as a Singaporean with totally no background in the property market.
You surely have a better understanding of the neighbourhood you live in, or grew up in, than most other people - even this can be sufficient grounds to specialise.
It helps to know, for instance, that the minimart nearby sells the cheapest rice and spices we'll ever find in Singapore; or that it's better to get a unit a bit further from the nearby school due to morning traffic and noise.
So consider the depth of your existing knowledge and experience; if it's enough, you may want to start by specializing in those areas (you can branch out later).
2. The First Few Sales You Close
The first few sales can have a formative impact on your career, and decide how you'll go forward. Sometimes, it's these first sales - rather than a conscious decision on your part - that determine whether you'll specialise in something.
First, your reputation and initial connections are often made from these initial sales. For example, if you find a lot of initial success in renting out retail spaces, you may be seen as a specialist in this, whether you intend to be or not.
Your contacts - such as previous clients - may start telling others that you got them a great retail space (thus prompting more business of this sort).
Second, you have "broken the egg" in these fields. That is, you've found something that works for this segment of the market; perhaps a successful technique for finding resale flat buyers, or having a spot-on pitch for expatriate tenants.
If this is the case, it makes sense to replicate your success and specialise, and build your initial income stream.
However, this can lead to dangerous complacency or over dependency later
When you specialise for this reason (finding early success in one area), you risk putting all your eggs in the proverbial basket. Remember that the property market changes, and that your "secret sauce" may not work forever.
You also risk under-educating yourself: when you hyper-focus on one area of the market, you risk learning more and more, about less and less.
This can result in having knowledge so niche it's virtually useless (e.g. you know the maintenance issues common only to condos that saw TOP between 2012 to 2017).
So by all means, capitalise on the first few sales you close, and perhaps specialise in that market segment at the start. But don't let it pigeonhole your later development.
3. Whether You Can Survive Greater Volatility
Market conditions can make certain industry segments a tough place to be in.
For example, consider the oil price slump in 2014 - this caused a painful drop in the high-end condo segment. Banks and energy companies scaled back due to falling oil prices, and used fewer expatriate workers; among the few who still arrived, housing allowances were often slashed.
As a luxury market focused property agent, this would be a painful development.
A generalist is in a better position to survive the downturn
In the above incident, property agents dealing with mass market properties still found demand, as locals continued with their upgrading plans within the heartlands and foreigners continued to rent cheaper housing in the RCR and OCR areas.
As you can't tell when market conditions will affect your segment, a specialist has to be financially prepared for greater volatility.
If you don't feel you can cope with this, then aim to deal with a wider range of properties.
4. The Nature Of Your Colleagues And Mentor
Whether you become a generalist or specialist may reflect the firm you work with. For example: if most of your colleagues are dealing with HDB properties, this is where you can find the most help and knowledge; it may be natural to go in the same direction.
Likewise, if your immediate mentor takes a generalist approach, you're likely to follow that ( Your source of guidance after all).
It is, of course, not some fated fact that you must follow the trend in your firm, or the road set by your mentor. But you must be prepared for potentially less available guidance, if you're going against the grain.
It might be a better idea to switch to a team or mentor who is more in line with what you want to be.
5. Your Marketing / Prospecting Methods
Say you want to specialise in a niche property area such as office properties, or industrial properties. In such cases, marketing on Instagram or Facebook isn't very useful; it's unlikely that business owners are scanning Instagram for their next office space.
Ads in trade journals however, or giving talks for trade associations (e.g. "How to Find Affordable Office Space for SMEs") will work better.
As a rule of thumb, marketing is more efficient for specialists than generalists.
This is because specialists use media that's highly targeted. For example, a Facebook post about a condo in Novena goes out to thousands of mostly random people, many of whom are unlikely to buy a condo (i.e. fewer genuine leads).
But an article in a niche publication, about what to look for in warehouse properties, goes to a much more focused audience (e.g. business owners.)
So in deciding whether to specialise, consider how you usually find clients. Your favoured methods may be better suited to a generalist or specialist.
Over the long term, avoid clinging to a binary view. Versatility is a strength.
Don't "commit" to only being a generalist or specialist over the long term; later in your career, this is an unnecessary restriction.
Many successful property agents break out of simple definitions over time:
They may begin as specialists, building reliable income stream in something they know well, but then expand later into generalists. Or they may start out as opportunists, simply closing deals as and where they can, and not worrying about any specialty; but they later start to focus on a given area, when they find disproportionate success in it.
Start from whatever gives you the best initial advantage; but don't close the door to learning other real estate segments and their lead generation, presentation and marketing methods as you move forward.
This era of change is the quickest in the history of mankind. Change is the only constant and the one who is most adaptable will emerge victorious in the long run.
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Get a 1-time free 30 min career consultation with Stuart and his team leaders. Schedule one right now.
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Stuart Chng, Executive Group District Director at Huttons, is a renowned leader and personality in the real estate industry.
He adores music and can play a few instruments decently without upsetting his neighbours. When not doing so, he enjoys pillow fighting with his son and coming up with silly puns which barely amuses his wife.
Professionally, he is a licensed real estate agent, an avid stocks, options and real estate investor, business owner, team leader, speaker and columnist for several property newsletters and blogs and is often quoted in media interviews on 938FM, Channel 8, PropertyReport, PropertyGuru and other publications.