Good Responses to Common Interview Question: "Why Real Estate?"
"Why are you interested in real estate?" This seems to be a common interview question. I understand the answers would be geared to the hiring firm be it development or acquisitions and their product type.
What are your typical responses when confronted with this? Or thoughts in general.
Why Real Estate?
"Why Real Estate?" is a question you can expect in almost any interview. That means that you have the opportunity to craft a unique story that you can bring with you to an interview. However, a major mistake is not coming up with a succinct story beforehand. There are a couple components to crafting your story accordingly.
First, you need to understand the asset class and its functions. In fact, this should be where you highlight your interest in a specific asset class and tie it to the firm. After you understand the position and its function you can relate it to a personal narrative. This will allow you to be specific when answering the question "Why real estate?". Tell a personal story and relate it to your interest in said real estate finance job. Additionally, you should try to work a bit of pathos into your story(see @tengleha example below).
"Why Real Estate?" Interview Answers
The following quotes are answers from verified industry professionals. These answers illustrate the structure summarized above.
My dad is in construction and does a lot of site work for development projects around (major city). My Grandfather was an agent for the (suburban) area. I've always thought they were interesting careers, but I knew I wanted to be a part of something bigger and better. The idea of buying/owning/selling a building as a tangible investment opportunity always intrigued me. When I'm in a city it's interesting to think of who the tenants are, what they're paying for rent, who owns the property and how they affect the value. Real estate also seems like an entrepreneurial industry, especially as you gain experience and have a strong network of professionals.
The best answers I've seen display some sort of personal connection to RE. For example, parents who developed/owned/managed, blue-collar parents who were part of the construction industry but the interviewer always wanted to be bigger and better (i.e. own/finance the buildings the construction companies build), a deep interest in architecture/design/urban planning.
Quick Real Estate Interview Answers
The following answers are specific enough to get the job done. However, these answers are common. If you chose to use them then make sure you deliver with confidence.
My answer for my current position was because our assets are tangible and affect people's lives every day. It's a pretty cool feeling going to a development site and seeing people living in and enjoying something your firm built and manages.
If you already have a good understanding of the industry, then you can craft a variation of this answer without getting personal.
I like the fact that RE is essentially a hybrid asset class with both an equity investment/capital gain component as well as a fixed income/coupon portion in the form of rents.
In conclusion, you'll want to make your answer as personalized as possible while showing knowledge of the industry, firm, or asset class.
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I recently went to an interview that was for a development analyst position and got asked why development? I sat there like an idiot because I don't want to do development. I went to another interview for acquisitions and was able to speak about why real estate and why acquisitions for a while. Point is, if you cannot explain it yourself and you don't get excited when asked it, is it what you're really interested in?
This should be the easiest question you get during an interview. If you don't know the answer, you probably should interview for something else.
just look at the floor and mumble something about "y'know, buildings and stuff"
I always win in monopoly
It's a unique asset class; -There isn't necessarily a liquid market in which to realise value -Property is a depreciating asset, requiring consideration of 'management' and how this is modelled -Investors expect an appreciation of value, raising issues of stagnation when prices are falling -Special legal treatment, REITs etc.
Hope this helps, check your school library for something along the lines of 'An introduction to Real Estate Investment'.
RE is tangible RE affects your life every day - you live in a house/apartment, you work in an office, you shop in retail stores etc. RE is one of the oldest asset classes and is not going anywhere There are many ways to invest in RE Lots of leverage can be used
Why Real Estate? (Originally Posted: 06/08/2012)
Great to finally see a dedicated forum for those interested in Real Estate. I am a recent grad and through my interview experience I have been often asked the question "Why Real Estate?"
My approach to the question usually touches on the tangibility of the asset class, my interest in architecture, and how real estate is used by everyone on a daily basis whether it involves where the live(residential), where they shop (retail), or where they work (office).
Interested in hearing some other perspectives...
we all don't come from rich families or have those connections...
don't be a DB wasp
DCD, you come off as if your grasp of RE careers is limited to single family real estate agents. I know you know this isn't the case. Believe it or not, not everyone in RE is there because they got a 1.2 GPA in a ceramics degree. Some genuinely want to be. First off, this is finance- you're going to be hard pressed to find a job you like if any sort of "societal value add" is high on your priority list. RE is the closest you'll get IMO. You're owning the very places where people live/ work/ travel/ shop/ and entertain themselves. It's not that difficult to actually get a feeling that you're doing something. If you instead want to make a living shifting money from your left hand to your right hand, that's fine too. It's just not for everyone. Lastly, owning property is about 1,500x more plausible of a career "end game" than making partner or MD in PE or IB. I know people in RE who are making more than those positions and they didn't have to walk around with knee pads on for 10 years to get there (or start their career with 100+ hr work weeks).
I'm pretty sure most people just say they like that it is tangible.
Going to be the contrarian here and say it doesn't do it for me. Perhaps I'm just bitter, because it seems that over half of the 20-30 year olds I know in the industry are only in the industry because their daddy was, but your dad being successful and having a dream of developing property makes me want to hire your dad, not you. A good way to bring up your family's success in the industry is pointing out that you worked for your father's company, if you did, at least then showing that you had some sort of impact on its success.
I would focus more on the "encompasses a multitude of aspects of other fields that I like" aspect of your answer, which is very strong IMO.