Real Estate
Overview
Job opportunities in the real estate industry are divided into four distinct fields: sales, management, development, and acquisition and analysis. Although crossover among these sectors is possible, most people start out specializing in a specific area.
Sales and LeasingThis segment includes everything from residential real estate brokers to larger corporations that broker bigger commercial properties such as office towers.
ManagementProperty managers are responsible for maintaining property values. They deal with tenants, manage finances, and physically tend to the property. Of all the segments of the industry, this one has been hit hardest by the wave of mergers and acquisitions sweeping the industry. For job seekers, this means fewer jobs as companies look to become more efficient and cut redundant staff.
DevelopmentDevelopers are responsible for taking a property idea and making it a reality. This is a complex process involving architects, engineers, zoning officials, builders, lenders, and prospective tenants. Development is not always the gravy train some make it out to be. In the early 1990s, when real estate prices crashed, construction dried up and a lot of commercial office space was left vacant. Deprived of rents, a lot of developers had to scramble for survival. Many ventured into other areas of real estate. Today, many of the largest real estate developers are also property owners and managers.
Acquisition and AnalysisAny kind of investing in real estate requires a thorough understanding of how to analyze the value of a property and navigate the maze of land-use regulations, zoning laws, environmental impact reports, financing realities, and other barriers to buying and developing a property. The people who develop, market, and manage REITs and other real estate investments are financial types, often MBAs, who are charged with evaluating and arranging for the purchase of properties.
Job Prospects
Unlike much of the rest of the economy, the real estate industry has been doing quite well. Though the robustness varies between sectors, with the residential side of real estate doing best, the industry is hardly in the hangdog state that nearly every other part of the economy seems to be in.
Nevertheless, without solid connections in the industry, you may have a hard time establishing yourself. Real estate veterans rely on the advice of contacts to help make recruiting decisions. Rather than using traditional recruiting processes, firms often bring on new talent through personal networks and word of mouth. It’s even harder to break into the elite club of real estate investment finance.
If you don’t aspire to join the elite ranks of real estate investment management, you still have before you a wealth of rewarding positions in property management, real estate services, and residential brokerages, as well as very challenging development roles in corporate real estate. Beware though: Skills in one real estate market aren’t necessarily transferable to other markets. Select your location carefully. And once you’re in, be prepared to ride the roller coaster of a cyclical industry. Although the real estate industry is in a protracted boom period right now, veterans assure us that busts will come, and those busts won’t be pretty.
Love-Hate
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What's Great
Uncorporate Culture
The industry is laden with independent business people and bound together by relationships that tie people together between companies rather than just within them. This fosters a culture that the freewheeling spirits of real estate heartily endorse: Professionals work flexible hours and conduct business in pleasurable environments like the golf course or over dinner.
Building the Future
Real estate, and especially development, gives you the opportunity to put a mark on the world and leave a legacy. On a grand scale, Donald Trump’s buildings that litter Manhattan’s skyline bear this out. As does Arthur Levitt’s Levittown. On a smaller scale, one insider we talked to said there was something very cool about naming a street in a subdivision after himself: “Go on Yahoo! Maps, type in my name, comma, Tucson Arizona.” Sure enough, Yahoo! pinpointed the street bearing his name.
The Real in Real Estate
Insiders like the fact that they deal with tangible products. They get satisfaction in being able to walk into the thing they’ve built, financed, sold, or project managed.
What's To Hate
Testing the Virtue of Patience
Real estate projects rival Russian novels in length. Commercial brokers might spend years cultivating a relationship with a client before ever, if at all, fulfilling a deal with them. Real estate investment firms often hold portfolio properties at least 3 to 5 years. Building a track record or establishing a practice entails having the endurance to see a multitude of deals through to fruition.
The Hours
Industry insiders carp about the hours they keep, though the complaints vary depending on sector. Asset managers note that their work becomes extremely hectic when they purchase or dispose of a new property. Commercial brokers say that they keep long hours, with 12-hour days being commonplace, when they are building their practices. Mortgage brokers and residential brokers say that they are “always on.”
Paving Over Paradise
Though the more eco-friendly developments have taken hold, those who are squeamish about putting a strip mall on a newt breeding ground, for example, might work in conflict with their ideals. Put more bluntly, one insider says, “Most developers aren’t into sustainable development; if it doesn’t help the bottom line, we won’t do it.”
Job descriptions and tips
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Key Jobs
The great thing about real estate is it's not goingaway. It's the level of demand and how many jobs the market can supportthat will fluctuate. For salespeople, there's plenty of competition. Onthe management side, there is the popularity of rental housing and a risingnumber of job opportunities in apartment and assisted-living management.Those who want security can find work as appraisers, as these jobs are lessaffected by the industry cycle.
Residential or Commercial Agent or Broker
These are individual sales professionals who provide their services tobrokers for a commission, usually 6 percent. To be an agent, you must be 18years old and have graduated from high school and passed a written test onproperty laws and real estate transactions. Some states require additionalclassroom training. To become a broker, you need a broker's license,which allows you to open your own agency. A commercial sales professionaltypically specializes in a specific property type: apartments, retail,office, and so on. Salaries vary according to location, level of effort, andluck. Salary range: $50,000 to $150,000 or more.
Appraiser
A real estate appraiser estimates the value of properties for taxation orvaluation purposes using a series of standard methodologies. Thoughrelatively immune to the cycles of the industry, an appraisal position issomewhat insular within the industry and doesn’t offer the mobility acrossfunctions as do other positions. Salary range: $50,000 to $75,000.
Property Manager
A property manager manages and leases properties for owners. Day-to-dayduties include a broad spectrum of activities including leasing property totenants, handling tenant relations, maintaining occupancy levels and leaserates, preparing reports and budgets for property owners, hiring serviceemployees, collecting rents, paying bills, negotiating contracts, andmaintaining and repairing property. A property manager often arrives at hisor her position through previous work as a leasing agent tenant servicesrepresentative, assistant property manager, or other specialist within theproperty management field. Entry-level assistant property manager salariesrange from $30,000 to $50,000. Salary range for property manager: $55,000 to$90,000, depending on geography.
Consultant or Advisor
With the increase in institutional investing, demand for this type of experthas risen. Prior experience in investing or management is necessary. A realestate advisor is generally good with statistics and excels at dealing withclients. Salary range: $55,000 and up.
Developer
A developer makes property plans come to life. To become a developer,you'll need excellent communication skills and a strong understanding ofall aspects of the real estate industry. Most developers start out inentry-level positions with a developer or contractor and then work their wayup. Salary range: $70,000 to $125,000 or more.
Getting Hired
In real estate, you start at the bottom and work your way up. Whetherit's as an assistant sales agent or in an entry-level position with adeveloper or property management company, that initial experience isgenerally a springboard to your first sale or promotion. Exhibiting strongmotivation and communication skills will help speed up that process. Almostall real estate companies look for three things in a potential hire: peopleskills, an entrepreneurial bent, and a constitution to weather bad times.Note that many people enter real estate after several years in anotherprofession and that making a few investments on your own is a good way togain experience in the industry. If you're interested in getting intoreal estate, keep the following in mind:
- Check with brokerage, management, and development firms about internship programs. After you get one, be open, enthusiastic, and willing to learn. Much of the real estate industry revolves around relationships. If people like you and know you can do the job, they'll hire you.
- Try to get an entry-level paid position with a property management or development company. This will save you the stress and pressure of working on commission while you're just starting out.
- Find a mentor who can show you the ropes of the industry and help you make contacts. Working under someone is the ideal way to learn the industry and develop contacts. Be persistent, unassuming, and willing to take rejection. You can't assume anything about real estate without making an effort first.
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