The global real estate investment market is measured in trillions of dollars. The same is true for the commercial real estate and residential real estate markets in the United States. The takeaway here, in case you missed it, is this: there's money in property.
There are plenty of ways to get your piece of the pie in this market, from flipping houses or becoming a broker to managing real estate assets or even developing real estate-focused investment strategies. If you're less interested in how properties are built and more interested in how they're financed, you may be looking at MBA in Real Estate programs to launch a career in the field.
As MBA concentrations go, real estate isn't among the most popular. It's also not one of the highest-paying MBA specializations—and that might leave you wondering 'Is an MBA in Real Estate worth it?'
There are two answers to that question: the simple one and the complex one. The simple answer is yes. A real estate MBA is worth it provided you graduate from one of the top business schools. The complex answer (i.e., everything below) looks at earning potential versus lost income, the salary boost offered by the MBA compared to other master's degrees in real estate, and even whether you'll enjoy pursuing this degree. Your reasons for researching this particular degree may not be wholly financial, after all.
In this article, we 'll discuss whether an MBA in Real Estate is worth it by covering the following:
An MBA in Real Estate is a specialized Master of Business Administration degree pathway offered at some business schools. It is designed to teach students about real estate investing and the business side of real estate development.
Students in all types of real estate MBA programs study the financial, investment, and operational sides of real estate. Even so, course lists and overall focus may look very different from school to school. In the Southern Methodist University Cox School of Business' two-year program, for instance, students complete coursework in subjects like:
There are also plenty of real estate MBA programs that devote the majority of credit hours to general management, project management, and finance. In these programs, students might only take a handful of courses related to real estate.
A specialized MBA isn't the only way to launch a real estate career, however. Some general MBA programs offer real estate-focused add-ons. At The University of Michigan - Ann Arbor's Stephen M. Ross School of Business, for instance, students pursuing an MBA degree can complete an additional 17 credits through the A. Alfred Taubman College of Architecture and Urban Planning and the Rackham Graduate School to earn a Certificate in Real Estate Development.
Most MBA students who specialize in real estate don't aspire to buy, sell, or develop property themselves. They're not looking to become real estate agents or to go into real estate management. Instead, real estate MBA grads are usually looking to run a real estate hedge fund or a real estate investment trust (REIT). If they want to be involved in development projects, they usually end up working on the finance side of large-scale projects funded by big corporations and Wall Street investment banking firms. Or, they may advance into senior-level executive roles in real estate development or management companies.
People in MBA in Real Estate programs may be passionate about property, but that's because they can see the business potential of it. They don't necessarily want to become real estate entrepreneurs. Some do, of course; there are certainly MBA graduates who go on to open brokerages or decide to stick with selling real estate. Most, however, pursue other opportunities.
A specialized MBA is first and foremost a business degree, which means you can work in a variety of roles after earning an MBA in Real Estate. You'll be qualified to step into senior-level and executive positions in real estate development firms, private equity and investment management firms, and banks. You might work in:
At first glance, the average salary associated with earning an MBA in Real Estate—$102,000, according to PayScale—may look low to you. That's only because many people think of MBAs as a key to riches, when the reality is that the average MBA salary is just $88,000. When people talk about the big salary boosts associated with MBAs, they're often referring to the boost students get after graduating from the top-ranked business schools or salaries in consulting. The average MBA in Real Estate holder probably earns closer to $125,000 when you're looking at base salary, and might earn $210,000 or more when you factor in bonuses, equity, commissions, and other non-salary income.
At this point, you're probably wondering whether an MBA in Real Estate is worth it when it comes to earning potential. The answer is yes, and no. An annual income of $200,000 is significantly higher than the national average salary but may not go as far as you'd expect in big, expensive cities. You could potentially earn a lot more if you graduate from a high-profile program like Northwestern University's Kellogg School of Management or University of Pennsylvania's Wharton School of Business (because your network will be so strong and you'll get a level of career support that students at other schools don't necessarily receive). However, even at top schools, salaries for real estate MBAs may not be as high as salaries for consulting MBAs, marketing MBAs, or technology management MBAs.
In some disciplines, what you know and who you know is a lot more important than where you went to school. When it comes to MBAs, however, many employers give a lot of weight to the pedigree of applicant diplomas. That may be why lists of the best MBA in Real Estate programs is very similar to lists of the top business schools. The top-ranked schools for real estate MBAs include:
There are numerous 100 percent online MBA in Real Estate programs, along with hybrid and remote part-time programs. As is the case with on-campus programs, the school you choose matters. Some of the top online MBA in Real Estate programs can be found at the following colleges and universities:
Is an online MBA in Real Estate worth it? These programs for distance learners are an excellent choice for students who need to continue working while pursuing an MBA or have personal obligations that make traveling to and from campus difficult. However, convenience comes at a cost. Pursuing an MBA online, regardless of which concentration you choose, means missing out on valuable networking and recruitment opportunities. You may also not have access to high-value internship placements at companies local to your college or university.
Some people aren't sure whether they'll get ore out of a real estate MBA program or a Master of Science in Real Estate (MSRE) program. You can advance into senior roles in real estate development or management with either degree. Most MBA in Real Estate programs take longer to complete than MSRE programs, but there are also two-year MS in Real Estate programs and accelerated real estate MBAs. Real estate MBA programs tend to be finance-focused, but some look a lot like MSRE programs in that they cover a broad range of topics, including development and capital markets. At many institutions, students in both pathways are required to complete capstone courses, internships, and other experiential learning projects. In short, both degree pathways are "worth it": you can get a strong education in the business of real estate in either.
The MBA, however, will almost certainly help you earn more money over the course of your career. The average salary for Master of Science in Real Estate holders is $74,000, compared to more than $100,000 for a real estate MBA—and that's before you factor in non-salary compensation. MSRE salaries aren't always lower, but if your goal is to earn as much as possible, the MBA is the better bet.
There are many good reasons to enroll in a traditional full-time MBA program versus a part-time MBA program or an executive MBA program. For example, in a full-time MBA in Real Estate program, you'll be able to take advantage of every networking event and internship opportunity that comes your way. You'll have time for extracurricular and co-curricular activities. Most importantly, a lot of companies tend to recruit full-time MBA candidates (possibly because they find recruits via in-person networking events).
The downside of enrolling in a full-time MBA program is that if you can work at all, you probably won't be earning anywhere close to what you're earning now. That's a risk when there are no guarantees you'll make more money—or even have a job—after graduating from a real estate MBA program. Only you can decide whether sacrificing a few years of income now and possibly taking out hefty student loans is worth the potential future income boost, given the numbers above.
Pursuing an MBA in Real Estate will give you a solid grounding in core business fundamentals and real estate markets, finance, taxation, regulations, and other topics specific to the business of property. That said, the time and money you invest in a real estate MBA will probably only be worth it if you're accepted into a top-tier school. The fact is that most MBAs who don't graduate from top b-schools don't see the same increase in earning power. They still emerge with student loans, and they still lose income in the process, however.
Second-tier colleges and universities can't offer students the same powerful connections and the same cachet that the Whartons and the Kelloggs can. You might struggle to pay the high cost of tuition at these schools, but you'll emerge from those programs into a world of lucrative opportunities and robust career support that lasts a lifetime.
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