Pinpoint Your Ideal Buyers and Renters

Who are the ideal buyers for your properties? Who are the ideal renters?

You may have heard other real estate investors divide their prospects into housing segments such as empty-nesters, yuppies, first-time home buyers, move-up buyers, the age 55+ market, and, more recently, the Hispanic market, the Asian market, and even the Islamic market.

Although any or all of these labels might stimulate your thinking, never let them determine your market segmentation strategy.

I learned that lesson during the 1990s while I was conducting my Stop Renting Now! Seminars throughout the country. My seminar attendees fit no specific demographic. Their ages ranged from 25 to 55. Their incomes spread from $20,000 to $120,000. Some had $100,000 put down on a property, others had nothing. They came from all races and backgrounds.

All those people had just one thing in common. They all wanted to stop renting and start owning. And that need cut across all the segments.

So when you create a target market for your properties, think precisely. Picture clearly in relevant detail the characteristics (demographics, psycho-graphics, lifestyles, preferences, turn-ons, and turnoffs) of the people for whom you would like to create their MVP, or Most Valuable Property. Then design the features of your property and your sales or leasing program to motivate those buyers specifically.

Hit the Bull’s Eye

What features and benefits would really motivate your prospects? You need to find their most intense motivating needs. In one of my properties, for example, I found that I would have the most luck renting to nurses - and I determined that those nurses were worried about safety and security. So I increased outdoor lighting at the property, installed double-deadbolt door locks and placed heavy-gauge wire mesh screens on the building's first-story windows.

Those tenants also valued more closet space than then norm, so I made sure to install more of it in each unit than older rental units in the neighborhood typically provided. As a special touch, I installed full-length mirrors on the new closet doors. This not only played to vanity but also gave the bedrooms a spacious appearance.

How do you identify the MVP features for your tenants? Since you can't read minds, you need some techniques to discover those elements of your value proposition that will motivate your customers to act now. Here are several methods that have worked for me and other entrepreneurial property investors: 

• Talk informally with people. Discover their problems.
• Pay attention, eavesdrop, read, watch.
• Talk with insiders and experts, such as real estate agents who work in the area.
• Conduct informal focus groups.

 So remember to dig deeper and pinpoint the needs and desires of your specific customers. The specifics will always produce better results for you than generalities.

The topic of today’s blog post is also covered in Trump University Real Estate 101: Building Wealth with Real Estate Investments, by Dr. Eldred.