Best Real Estate Careers
What are the top jobs available in the real estate industry?
Real Estate Careers
In this article, we will explore the different career options in the Real Estate sector. These might be a good option if you did a real estate major, or studied business, finance, or accounting.
For each career, we will look at difficulty (how hard it is to get the job), work hours (work/life balance), and lastly pay. Hopefully, it can help you decide which career might be best suited for you.
The Real Estate jobs that will be explored are:
- Real Estate Investment Banking
- Real Estate Private Equity (Acquisitions and Asset Management)
- Real Estate Brokerage
- Real Estate Development
#1 Real Estate Investment Banking
Investment Banking involves providing financing through debt or equity, so raising money for clients, and advisory services where you provide advice on things such as asset sales, mergers, and acquisitions to clients. These clients aren’t individual home or building owners but rather include lodging companies like hotels and cruises, gaming casinos, and real estate investment trusts, which are a type of company that invests in real estate with certain tax breaks.
Pay: As an analyst, which is the starting position, you can expect to earn over $100,000 as your base salary, plus a bonus on top of that, which depending on your performance and that of your team could lead to a total salary of above $150,000 as a first year out of college.
Work/Life Balance: As a trade-off for the high pay, the work hours in investment banking are notoriously very intense. They are known to average at around 80 hours per week.
Difficulty: Recruitment for this type of role is very competitive. To start out, roles are available for both summer internships during college, or in your first year fresh out of college. As for how you get in, for the most part, its being a top student at the best university in the nation, having previous relevant internship experience, and networking with people already in the industry.
Examples: Major employers in this field are the big investment banks like JP Morgan, Bank of America, or Citi.
#2 Real Estate Private Equity
Unlike in real estate investment banking, in real estate private equity, you actually buy and monitor the real estate, instead of just providing financing or advice for it. This path can be split into two subgroups: real estate acquisitions and real estate asset management.
Acquisitions
Typically, real estate acquisitions concerns raising money from outside investors and then using that money to find attractive deals, find the right financing, answering questions like “how much debt should we take on and at what cost” etc., and lastly acquiring the real estate. These outside investors are the likes of pension funds, insurance firms, and endowments which leave their money with the private equity fund for several years.
Asset Management
Once the process of real estate acquisitions is complete, you have the real estate management, which is the side that works to make sure it gets a good return on investment. To be clear, asset management is focused on the financial performance, not the physical management of the place. For the actual day today activity, say if a real estate private equity fund has acquired a hotel, they’ll outsource the housekeeping, maintenance, and general management to a third-party management company. The asset manager oversees the bigger picture of following the business plan and eventually selling the property for a return.
Pay: Compensation tends to be above the $100,000 range, but slightly less than in banking. Generally, the acquisitions side tends to be paid slightly higher than the asset management side.
Work/Life Balance: The work hours will differ a little depending on which group you are in. On the acquisitions side, it tends to be around 60 hours per week, whilst for the asset management side its around 50 hours per week.
Difficulty: For breaking into this type of a role, there’s no clear guidelines like in banking. Instead, some people might work at a real estate brokerage and then make the switch, or others might work in real estate investment banking, while others might do an internship and get in fresh out of college. Since there’s no clear path, this tends to make it slightly less competitive. Generally, since acquisitions is seen as more prestigious it can be seen as a more competitive role.
Examples: The most prestigious companies in this field are generally private equity players like BlackRock, and KKR, as well as more real-estate specialized ones like LaSalle, and Brookfield.
#3 Real Estate Broker
This path is generally split between residential and commercial spaces.
Residential real estate refers to individual condo units or houses where junior brokers work with a more senior broker and assist them in showing properties, sending emails, and doing other administrative work.
Commercial real estate refers to entire buildings, shopping malls, industrial warehouses, etc. and often have a smaller team with a junior member.
Since commercial properties are bigger and arguably more complex than individual residential units, these junior brokers often do more sophisticated financial modelling and deal facilitation. The work here also varies largely on the team and the types of the deals that come by, ranging from multi-million-dollar transactions to small site leasing deals.
Pay: Brokers operate on a “eat what you kill basis”, essentially your pay is pretty much directly linked to how many deals you can facilitate and the commission rate that comes with each deal. As you can imagine, this creates a huge income range and makes it difficult to measure how much you can expect to make.
For commercial brokers in the USA, you’ll see a range from $23,400 to $795,620 with a median salary of $175,561. Junior brokers will likely fall towards the lower part of that scale.
For residential brokers, the average salary in the USA comes in around $68,256, which makes sense given that the typical single-family residential property will be valued at a lot less than an entire commercial building.
Work/Life Balance: This career offers a healthy work-life balance. As a real estate broker, you are likely to be setting up your own schedule to meet with clients and partners on a pretty flexible basis. Therefore, hours are really determined by how many clients you and your team take on and how much time you need to show properties, provide guidance, and facilitate key property documents. A rough estimate of 45 hours per week can be expected.
Difficulty: When it comes to recruiting for these types of roles, it can be somewhat difficult, particularly when you target companies or teams that are known for bringing in large and expensive deals. The nature of the work itself is very relationship and client based, which makes recruiting with various firms and brokers very network based as well. On top of this, the mandatory real estate license exam poses as an additional barrier that isn’t required for some other real estate jobs in this article.
Examples: Some well-known residential players in this field include Keller Williams, Coldwell Banker, and Century 21. On the commercial side, real estate firms include CBRE, Cushman & Wakefield, and JLL to name a few. Note that many of these firms will have subsidiaries or sister companies that engage in both residential and/or commercial real estate.
#4 Real Estate Developer
In short a real estate developer finds financing via investors and lenders, looks for property or land, acquires it, and then oversees the development of the space. The role is very collaborative, as you need to work with architects, interior designers, engineers etc., to make it happen. Also, it usually involves putting some of your own money, and a majority from partner investors.
Pay & Work-Life Balance: It’s difficult to assess pay and work-life balance as there isn’t a typical “job” where you show up each day and earn a salary. Instead, it’s more similar to entrepreneurship, where nothing is guaranteed, but the upside is potentially unlimited. It depends on how much you’re willing to put in. It’s common to hear of real estate developed billionaires like Wang Jianlin one of the richest men in China, Donald Bren, or even Donald Trump. So, it’s hard to put a figure on it, the career is risky, but has a big potential upside.
Difficulty: There aren’t really any barriers to development, as you don’t need permission or pre-requisites from anyone to get started. This job doesn’t require any sort of license or special degree, but it is common to already have real estate experience in the books.
Examples: Some examples of large real estate developers include the Wanda Group, Irvine Company, and The Related Companies.
Additional Resources
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