13 Mar, 2020
Seek Your Career in Real Estate
This informal CPD article on Seek Your Career in Real Estate was provided by Veronica Bateman at Bayfield Training, a training company providing a wide range of Financial Modelling and Real Estate Strategy courses for the Global Real Estate Profession.
Why seek a career in Real Estate? An overview of the European market
Real estate is one of the biggest industries and is the world’s largest asset class (about 20% of the nation’s wealth is held in property). Additionally, commercial real estate generates 70% of the UK’s Gross Domestic Product (GDP). This means the career aspects within the real estate sector are safe, and there is potential to grow within the community. Real estate is an ever-changing business, to reflect the population’s needs. In Europe, the real estate industry is a prosperous market to be in as it attracts foreign investors due to its safe nature.
Types of companies in the Real Estate industry
There are many different areas to work in within the Real Estate industry. These include:
- Large businesses.
- The money they invest comes from the reserves the company has built up. They will invest the money into redeveloping properties, buying new companies and expanding portfolios.
Private equity companies:
- Private equity companies use money from external investors that have been pooled into funds to invest in the market.
- They agree with investors as to the percentage of returns they will share, and so they must achieve the business to be able to meet these agreements.
- Deal with high net wealth of individuals/families.
- Aim to find opportunities to increase their wealth through real estate investments.
Real Estate Hedge funds:
- Similar to private equity companies.
- As well as real estate, they invest in stocks, shares, and foreign exchanges.
- Handles the wealth of a nation or state.
- Handle valuation, marketing and sales and surveying property.
- Many people work at consultancies to get project experience, build their network and experience how other companies work.
- Lend the money for investments.
- Can start individual specialised mortgages for companies such as property companies, private equity companies or family offices.
Real Estate Developers:
- Increase value of properties by developing existing properties or knocking down the properties and rebuilding them using the space.
- Technical training is required through education/apprenticeships.
- Judgements about necessary repairs are made.
- Contribute to the real estate industry without buying/selling/renting.
- Many provide PropTech: Property Technology that helps individuals and companies research, buy, sell and manage real estate.
Getting your Real Estate Career Started
Choosing your role within the real estate industry
- Must be in tune with market trends, understand where the industry is focusing, and know what would make a good investment.
- Investment managers research and identify properties that match trends for investment and then will analyse with cash flow modelling whether it’s a good investment to make. The finance experts will then advise where to get the capital to acquire the property.
- Plan on how to generate profits.
Debt and structure finance:
- Use quantitative analysis to judge if the proposed deal will create returns for them.
- Cash flow modelling is involved.
- Less communication involved so suited for introverts.
- Work to generate equity that the company would put forward to buy assets.
- Typically suited for an extrovert who enjoys speaking with people.
- Can be hands-on from a financial perspective to make sure the building is leased etc.
- Suited to extroverts as it involves a lot of speaking to people to sell assets.
Real Estate Portfolio managers:
- Oversee assets to ensure the returns are being achieved for investment.
- Good cash flow modelling skills required.
Accountants and lawyers can also support the real estate industry.
Choosing your Real Estate career – Further Considerations
When choosing a career path in the real estate industry, it’s important to consider how hands on you want to be, as there are two ends of the spectrum in real estate: hands-on or strategic. Positions in asset management, capital markets, capital raising, portfolio management and investment management require good knowledge of both the “hands-on” side and the strategic, financial skills. However, at one end of the spectrum, developers are mainly “hands-on” and contrastingly, fund managers for example are strategic and handle finance.
Other things to consider include your desired work/life balance: in investment management for example, the work hours can be very high to close deals and the job can be stressful with high risk. On the other side, jobs in facilities management, capital raising… etc tend to have more regular work patterns with a more predictable, balanced life.
In terms of salary, the UK median salary for jobs in real estate is £48,000, however in positions where you’re required to generate higher returns, there is higher potential for bonus pay.
Typically, either a business-related university degree or an apprenticeship qualification is required to get jobs within the real estate industry. Furthermore, everyone who works at the finance/strategic end of the spectrum within real estate, for example fund managers, investment managers etcetera is typically required to take a cash flow modelling test to prove they have proficient cash flow modelling skills.
In conclusion, the real estate sector is ever-changing, exciting and profitable to work in. With a wide spectrum of types of company to work for and roles within these companies, there is a job to suit anyone looking into entering the sector.
With advice from MacDonald & Co, recruitment company for the real estate sector.
We hope this article from Veronica Bateman at Bayfield Training was helpful. For more information about Bayfield Training, please visit their CPD Member Directory page. Alternatively please visit the CPD Industry Hubs for more CPD articles, courses and events relevant to your Continuing Professional Development requirements.