Riches in Niches: A Guide To Greater Rental Property Cash-flow!

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In today’s world it seems that the more specialized a person is, the greater their earning power — and the same holds true for investors and their cash-flow.

You only have to look at the health care industry for real life examples of how specialization has enhanced the earning power of doctors.  For example, a family practitioner who is a generalist could never expect to have the earning power of a “specialist” like a neurologist.  

Continuing with this example, if you accept the premise that being a doctor is the category and within each level of speciality (a niche) the earning power of a doctor increases, you can then relate to the notion that there are “riches in niches”.

So, how does this notion of “riches in niches” apply to real estate investors?

First the good news: the quest for those riches does not require that you commit years of your life and $100,000’s in school loans to obtain.  In fact, it doesn’t take a lot of thought and with just a few phone calls and you can be on your way to niching your business into significantly increased monthly cash-flow.  


As property owners, one of our biggest priorities should be to obtain the highest rents possible.  There should be no exception to this rule!  And yet many investors, while agreeing in concept, are not able to do what it takes to maximize those rents — often times because they don’t know where to find tenants willing to pay the highest rents.

Here is where the concept of “niching” comes into play.

Just like with the health industry and the doctor example above, our tenants follow a similar stratification.

Different Levels of Niche Tenants

First are the market rate tenants.  These are the tenants that pay their rents from their earnings.  In many locations market rate tenants create the basis for local rental rates and from the perspective of many investors, these tenants offer the fewest risks for the rents received.  In essence, market tenants are similar to the doctor who is the generalist — providing good solid income — just not the highest that they could be obtained.

At the next level is the category I refer to as “government assisted rents“.  The big player in this category of course is the Section 8 program.  In many locations Section 8 tenants represent a great way for investors to obtain rents that are at least as high as those obtained for market rents and often times more.  Of course for more then a handful of investors the perceived risks of having a Section 8 tenant outweighs the benefits of the higher rents.  Yet, for those that have learned to “specialize” in this niche their rental income is often higher then comparable market based income.

In just the two examples listed above, it is becoming evident that the path to specialization regarding tenants can lead to higher monthly rents.

An important note —  I realize that for some investors the notion of having a Section 8 tenant is the last thing they want to explore, but hang in there as I continue down the path of “niching” into higher rents.

In many communities (mostly larger urban areas) there are a variety of programs who themselves specialize in assisting individuals who have unique housing needs.  Finding these programs is a great way to further “niche” into the tenant world and continue to increase your monthly rents.  Examples of these programs could include “Housing is Healthcare” a program focused on getting the homeless off the streets,  various drug rehabilitation programs, or individuals with disabilities (a really big and profitable niche). e.g. Tulsa Cares for HIV/AIDS patients 

Now don’t have a heart attack with the types of programs I mentioned above.  In many cases due to the unique circumstances of the individuals in these programs, it is the agency or program that enters into the lease with the investor and the agency then places and provides oversight to that tenant, thereby drastically reducing tenant management issues for the investor. All this, while the investor is receiving higher rents for supporting a unique “niche” their market.  What’s not to like?

I can tell you from personal experience that if you can tap into one or more of these special government assisted programs your monthly rental income will increase dramatically and your management headaches will most likely decrease.

But there are more examples of these “riches in niches”.

A very popular niche for investors in college towns is of course renting to college students.  While this “niche” can be as challenging as government assisted rents, it is nonetheless a very lucrative approach to maximizing monthly rental income.

Similar to renting to students is finding organizations or corporations who require housing for their employees, or perhaps visiting guests, or in the case of hospitals – have requirements to house professionals and patients or their families on an ongoing basis.  Often times you can arrange to lease your property out to these organizations, who in turn would be responsible for placing the tenants.  And because they need the flexibility and convenience, higher rents are the norm. 

I am sure there are other examples of “niches” that provide higher than normal rents and I hope that as an investor you are doing everything you can be to ensure that your portfolio is generating the highest possible monthly income. 

And if you are find yourself challenged by the very topic of this article, perhaps you are a bit too COMFORTABLE and your cash-flow is suffering… You decide!

Best of luck!

About Author

Peter is an active and successful real estate investor in the Baltimore Maryland region for the past 8 years and is one of the founders of The Club Mastermind a real estate investing coaching program focused on local coaches helping investors to perfect their game.


  1. This is a wonderful article that I’m sure will open the eyes of many current and future landlords. As you mentioned, there are some really incredible resources available to landlords for steady, corporate or government-assisted rents. You just need to explore your options. As someone who has benefited from one of these strategies, I strongly recommend others do the same.

    Nicely done.

  2. It used to be “Location, Location, Location” and to some extent it still is but you have brought up some very good points. Beats the shotgun approach of just shooting and hoping you will hit something. Narrow the target and your property becomes more of a value.

  3. I noticed that there is no information on how to find or contact some of these “niches”. Can someone please provide this information? I’m in Atlanta. Thanks in advance.

  4. Chris Ukachukwu on

    This article by Peter Giardini is definitely well-written but also a teaser. Makes me wonder if Mr. Giardini has a book in the works or if we are to expect a sequel soon. Thanks for the article in any case.

    It comes at a time when I’m scratching my head on how to maximize the rental income from a SF property I am wrapping up rehab on in Chicago. It was set up as a 2 flat When I got it, it had a 1 bedroom first floor unit and a 3 bedroom second floor unit.

    I’ve been thinking about a way to rent out this SF property as a rooming house (I know it comes with its own problems). If I do $400/room, I’ll get $2000 and although I’ll be paying the gas and electric bill, I’ll come out ahead as opposed to renting it out as a family home.

    MY CHALLENGE IS IN FINDING THESE (RELIABLE) ROOMING TENANTS. Are there agencies or sources for obtaining rooming occupants preferably on a housing program?

    When I got the property, the first floor had a sizable living room and dining room, larger than average bedroom and an eat-in kitchen while the second floor had a spacious kitchen, 3 avg sized bedrooms and a spacious bathroom and no living room — it is likely that one of the bedrooms must have been used as the living room. It didn’t make a lot of sense.

    So I converted it into a 5 bedroom SF home with the first floor intact and the kitchen upstairs turned into a spacious bedroom. So now, I have a 5 bedroom, 2 bath spacious home that is hard to rent for $1400. But I could have easily gotten $600 and $850 for the 2 units as it was initially set up.

    In hindsight, I’m not sure that my conversion makes a lot of sense either. Initially, I had intended to flip it but was talked into holding it because there may be imminent plans for developing the area.

  5. Ryan Lewis RN BSN on

    Good Information! I’m definitely open to “niching” again in the future.
    I used to contract with the state gov. rehab for mentally handicap residents (they always had aids on staff 24/7 with them) on one of my SF rentals. It had to meet certain criteria (there was an inspection…etc.) But, once approved, it was a guaranteed a little higher than market rent (maybe $10-20, it’s based on their social security payout) every month! It comes with it’s hassles…like the tenants do minor damage every once in while, but if they caused it…the gov. sent their own guy to fix it free of charge, for what it was worth. It wasn’t all that bad….rent was on time, always!!!

    Contacting them: well I knew another land-lording friend who was in it, they gave me the number to call….but, you could, I’m sure contact the rehabilitative state dept. and ask questions, no doubt…etc. For contacting these niches, if you don’t know someone…you’ll have to ask around/google or start calling the gov./agency and play phone tag.

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