Should You Go Back To School For Real Estate? Here’s How To Decide.

My MBA made a huge difference in my career growth in commercial real estate, and I can honestly say I wouldn’t be where I am today without that experience.

But not everyone has to go back to school to find success in this industry, and I would even say that, in some cases, grad school can be detrimental.

So in this post, we’ll walk through three scenarios where it can make a lot of sense to go back to school, and some reasons why you might want to forego grad school altogether and skip an advanced degree.

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Scenario #1: You Want to Make a Major Geographic Move

The first situation where going back to school can be a huge benefit is when you’re trying to make a major move geographically, without an existing network in the city you want to relocate to.

When I was considering grad school, I was laser-focused on living and working in Southern California. But as someone who was working in a small, sleepy college town in Arizona at the time, it would have been really challenging to make the move on my own.

By going to grad school and living in Orange County for almost two years, I was able to get plugged in with some of the biggest and most reputable commercial real estate firms in the market. This gave me almost a two-year window where I could really focus on building relationships with local industry professionals, without having a ton of pressure on me to land a job immediately.

If at all possible, I’d highly recommend choosing a grad school that has a very strong alumni network in the city you want to work in, or ideally, is physically located in the city you want to work in. This means that a school like NYU could be a great option if you want to be in New York, USC could be your best bet if you want to be in Los Angeles, and Georgetown might be the best fit if you want to end up in Washington, DC.

The goal should be to find a program that can help you get connected with the companies and individuals that are most active in the real estate markets that you want to live and work in, and the more university alumni you can find that are working in your target city, the more you’ll get out of a graduate school experience.

Scenario #2: You’re Making a Career Pivot and Want to Minimize a Potential Pay Cut

The next situation where I’ve seen going back to school make a lot of sense is when you’re looking to make a career pivot into commercial real estate, but you want to minimize the pay cut you’d have to take when making that switch.

If you’ve already spent 3-5 years (or longer) in a different industry and you’ve seen some success on that path, you might already be making good money, so it can be tough to think about the prospect of having to take a step back and start from the beginning.

But in a lot of cases, if you go back to school for an MBA or Master’s in Real Estate, you may be able to land a job after graduation at a senior analyst or even associate-level pay grade, and this is especially true for people coming from related fields like investment banking, corporate finance, accounting, or architecture.

Even though the cost of a graduate degree isn’t cheap at most schools, the pay raise you might see in your first few years coming out of a strong program can often more than make up for the tuition you’ve paid.

What I also really like about grad school for people who are new to the industry, or even people who have real estate experience but aren’t quite sure where they want to focus long-term, is that grad school allows you to sample different parts of the real estate business in a very low-risk way.

Most programs will expose you to the inner workings of acquisitions, development projects, or entire real estate operating companies through site visits or informational sessions, and grad school will also give you the time to be able to explore different career paths through hands-on internships.

Even though I already had some real estate experience going into my MBA program, I used my two years in school to take on internships in real estate private equity, investment sales, and lending, all of which helped me figure out where I wanted to focus after graduation.

Internships can be great opportunities to get your foot in the door at top companies (as a very low-risk and low-commitment hire), and these can also help you get a brand-name firm on your resume before starting the process of applying for full-time jobs.

Scenario #3: The Job Market Is Tight and Transaction Activity Is Low

The third situation where going back to school can be a really smart move is when transaction activity is low and the job market is tight.

When CRE firms slow hiring, the job search process can take a lot longer than it would in more “normalized” market conditions, and even if you’re already working in commercial real estate, your commissions or bonus checks can drop significantly during these times.

This means that your opportunity cost of going back to school during a downturn will be the lowest it may ever be throughout your entire career, and leaving the workforce for a few years usually won’t end up hurting you.

And similar to what I mentioned about internships, during a time when companies are hesitant to hire expensive, full-time employees, a part-time intern with a fixed end date tends to be a much more attractive option for companies looking to grow.

When you do end up landing an internship and transaction activity finally starts to ramp back up again, the company you’re working for will also probably need some more full-time help. And if you’ve done good work and built trust with your employer, you’ll often be the first person they turn to when looking to fill an open position.

If you start a one to two-year grad school program at a time when transaction activity is low, you’ll very likely be coming out of school when things are starting to recover, which means there could be a lot of open positions that need to be filled quickly by the time graduation rolls around.

When Grad School Doesn’t Make Sense

Now with all of that said, there are also a few situations where I see grad school as something that isn’t necessary (or even beneficial), and in these cases, this can just be a drain on your time and money.

The first situation is when you’re already working in commercial real estate, the market is steady, and you just want to work for a different firm or land a different role within the same city.

In most cases, this can be accomplished by spending the time and money you would have spent on school joining real estate industry organizations and attending local networking events, since these will typically give you the opportunity to build the relationships you’ll need to make your next career move.

I would also say that if you’re just going to school for the credentials alone (either through a fully online program or a general MBA program without a strong real estate alumni base), this also usually won’t be the best use of your time and money, since the in-person networking you’re able to do in real estate-specific programs is typically the most valuable part of a graduate school experience.

I also wouldn’t recommend going back to school if your main goal is to learn the technical skills you need to make it through the interview process or succeed on a day-to-day basis in an analyst or associate role in commercial real estate. Even the top schools in the country with strong real estate programs typically go to third-party providers to give their students access to this type of training, most of which you could buy on your own without an advanced degree.

Make the Right Decision for You

Regardless of whether you decide to go back to school, if you want to make sure you have the technical skills you’ll need to pass an Excel interview exam or hit the ground running in an analyst or associate role at a commercial real estate firm, make sure to check out our all-in-one membership training platform, Break Into CRE Academy.

A membership to the Academy will give you instant access to over 120 hours of video training on real estate financial modeling and analysis, you’ll get access to hundreds of practice Excel interview exam questions, sample acquisition case studies, and you’ll also get access to the Break Into CRE Analyst Certification Exam, which covers topics like real estate pro forma and development modeling, commercial real estate lease modeling, equity waterfall modeling, and many other real estate financial analysis concepts that will help you prove to employers that you have what it takes to tackle the responsibilities of an analyst or associate at a top real estate firm.