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.

tengleha:
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.

coolhandlucas:
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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Comments (120)

Dec 1, 2013 - 6:23pm

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?

Dec 1, 2013 - 7:44pm

From a purely real estate standpoint you want to add attributable value to properties. Take the bricks and mortar which is all the same and create an experience to the user that is tangible and adds value to society. List specific characteristics of the asset classes the company you're interviewing for works with and talk about some interesting things the company has with those properties or asset classes and how you could help them.

From a financial perspective you can use real estate finance to manage what is the biggest and one of the most important asset classes on the plane, real estate. Prudent allocation of scarce resources is at the very basis of financing, investing, developing and managing real estate.

Apr 12, 2019 - 3:16am

what do you like in real estate

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Dec 1, 2013 - 8:11pm

That is a question that only you can answer. For CRE brokerage, try saying something like: "I want to work in real estate because I can use my both my sales and analytical skills." You will need to tailor the answer to the job.

"He that hath a beard is more than a youth, and he that hath no beard is less than a man." ― William Shakespeare, Much Ado About Nothing
Feb 3, 2014 - 2:25pm

I've interviewed new analysts at my firm. It's always obvious who just wants a "good job" and who truly loves buildings. Every once in a while we get the person who you can tell - it's more than numbers on a spreadsheet. The answer for them, and the whole conversation comes easily and is authentic. It's not a stumper but in some ways hard to fake.

Feb 7, 2014 - 10:07am

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 and better (i.e. own/finance the buildings the construction companies build), a deep interest in architecture/design/urban planning.

Jun 3, 2014 - 7:46am

Answering the question "Why Real Estate" (Originally Posted: 06/06/2011)

Hey guys,

I am wondering how to best answer the question "why real estate" or "what do you like in real estate" with no previous real estate experience. Any ideas?

Thanks!

Best Response
Jun 3, 2014 - 7:52am

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'.

Jun 3, 2014 - 7:53am

Go onto the firm's website to see what kind of transactions they've done in the past, their investment strategy, if they publish research - read where they think the market is going, their sector focus (e.g. retail, office, residential, warehouse, etc) and so on. Then figure out what you like about it - this isn't a question others on WSO should answer for you (like so many people not having an answer for 'why banking'). If you do a bit of the research I suggested above, you'll likely get a better sense as to what you would (or think you would) like about RE.

They'll know you don't have prior experience from your resume, which they reviewed before your interview. This is a chance for you to say 'I've done some homework on your firm, what you've done in X, Y, Z... and I thought it was interesting because... '. Part of the question is to see if you've done some of the homework, and if you did, that shows interest beyond a canned answer.

Jun 3, 2014 - 7:54am

I just interviewed and got the internship at a startup REPE shop today. Although I had previous real estate experience (with a brokerage), my answer was that I was an architecture major my first year in uni and switched to econ when I realized architecture wasn't for me, and real estate seemed to be a reasonable combination of the two. If you don't have anything that concrete, you could try saying you're interested because you see opportunity in the industry after the recession, etc. Good luck!

Jun 3, 2014 - 7:55am

Just do not do what I did my first real estate internship Freshman year...

President: "So, why do you want a career in the real estate industry"
Me: "Well, I ugh, welllll it like makes me want to get up in the mornings..."

I had no clue why I wanted to get into real estate other then I thought real estate was 'cool' and I liked the idea of a physical asset. He just stared at me and smiled and continued on... lol.

Jun 3, 2014 - 7:58am

"I enjoy the idea of mediocre pay and working under someone who, while also making mediocre pay, works for either a giant, bureacratic financial institution or for someone who inherited a bunch of property"

Just joking of course, I love real estate. And there is a lot more to it than just local families and big life companies.

Jun 3, 2014 - 8:02am

I have a great answer for this question, and I feel a lot has to do with where you live and where you were brought up. Real Estate as an asset class functions differently then traditional equity or senior fixed income investments.

Most of the time equity and fixed income is made up of a product(s) which operate on a international scale. However, real estate, is the 1 asset which is 99% comprised of the local market. So when it it boils down to it, real estate is an asset made up of people.

Growing up in New York, the first thing you always asked a stranger at a party was, "which neighborhood do you live in, and how much is your rent." With such history, ability, and style of living people are always drawn to live in New York. And nothing quantitatively shows this more, then the real estate market.

"Their analysts, they don't know preferred stock from live stock, alright."
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Jun 3, 2014 - 8:03am

I have a great answer for this question, and I feel a lot has to do with where you live and where you were brought up. Real Estate as an asset class functions differently then traditional equity or senior fixed income investments..

Most of the time equity and fixed income is made up of a product(s) which operate on a international scale. However, real estate, is the 1 asset which is 99% comprised of the local market. So when it it boils down to it, real estate is an asset made up of people.

Growing up in New York, the first thing you always asked a stranger at a party was, "which neighborhood do you live in, and how much is your rent." With such history, ability, and style of living people are always drawn to live in New York. And nothing quantitatively shows this more, then the real estate market.

"Their analysts, they don't know preferred stock from live stock, alright."
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Jun 3, 2014 - 8:04am

I'll prefer to invest in real estate sector because in stock market the ratio or profit and loss is equal but in real estate business you'll always get a profitable return on your investment.

Jun 3, 2014 - 8:09am

Family ties (uncle is a broker)/ growing up stories work pretty well for me. I was always straight and told them I had no clue what I really like in real estate and just want to learn as much as I can and pick something once I have a better understanding (if pressed then I would just say XYZ because I think it is a very exciting time in XYZ right now given example 1, example 2 from recent news)

Jun 3, 2014 - 8:11am

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...

Jun 3, 2014 - 8:13am

I'll second that your response is the boilerplate answer to the "Why Real Estate" question. And as RE_Banker points out, while safe, it's generally not going to impress seasoned interviewers.

When I ask this question to potential hires, I'm looking for the back-story, the event or course of events in your life that made you choose real estate. Everyone knows that RE guys get pigeonholed, so I want to know what drove you to make the decision to dedicate yourself to real estate. For me, and the majority of people I work with, real estate was a part of our lives from an early age - meaning our parents/family/friends were developers, investors, brokers, etc. and our desire to work in real estate grew from working or spending time with those individuals.

For me, the best response to this question, is the one that directly connects you to the industry (from past experience), not basic observations like "people need a place to work/shop" or "I think architecture is cool".

Jun 3, 2014 - 8:14am

NPV Positive, what kind of personality traits and life experiences are valuable or can lead one to real estate?

I'm asking this for those of us not benefiting from nepotism--born into families with RE developers/investors.

I won't go into why I'm interested in RE, but there's a little bit of "looking over the horizon" thing going on here for me -- not knowing with complete certainty what lies ahead.

Jun 3, 2014 - 8:15am

You kind of have to dig down and answer this question for yourself. You can spin life experiences a lot of ways to give a credible answer to this question. I interviewed someone once who grew up in a poor(ish) area and said he fell in love with real estate when he saw investors come in and rehab struggling strip centers in his neighborhood (obviously went into more detail but this was the general idea).

You can say "what kind of personality traits and life experiences are valuable or can lead one to real estate for those of us not benefiting from a poor background" to counter this just like you did with your nepotism argument. Point is, you actually have to have a reason to like real estate to answer this question well. There isn't a boiler plate answer that someone can tell you that will standout in an interview.

Jun 3, 2014 - 8:16am

Thanks reLA. I'm actually interested in what kind of personalities thrive and love RE, not what the best answer to an interview question is.

Reason being is I'm coming up to a crossroads in my life: pursue economics grad degree or focus on RE finance

Jun 3, 2014 - 8:17am

Thinking about the answer to that interview question may help you think about committing to RE Finance.

Every type of personality is in RE just like every other high paying (relative to the average american job) industry. You should choose to do it if you have a genuine interest in it not if you think your personality fits a (if there is one) mold. Just my opinion.

Jun 3, 2014 - 8:18am

Hello,
The single most important thing in real estate is marketing, which is the way one can find sellers and buyers and without it one have no hope of success in the real estate industry.

Thanks

Jun 3, 2014 - 8:21am
OB23:

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...

I've heard candidates say exactly that in interviews...many times. It never gives the impression of "passion".

I get this bad feeling you are fishing for an answer that you can use in interviews. Honestly, if you can't figure out why you are passionate about the business, why bother working in the business?

Man made money, money never made the man
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Jun 3, 2014 - 8:25am

Alt-HOI:

y

'Cause, bro. 'Cause

Commercial Real Estate Developer

Jun 3, 2014 - 8:26am

"Why real estate?" question (Originally Posted: 08/22/2013)

I was interviewing some candidates today, and got a mix of standard and stupid answers.

What are the BEST and WORST answers that you've come across?

Please don't quote Patrick Bateman.

Jun 3, 2014 - 8:28am

My answer for my current position was because our assets are tangible and affects 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.

Lana? Lannaa???? LANA!!!!!!!!!?!?!?!

See my WSO Blog | See my WSO interview

Jun 3, 2014 - 8:29am

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.

Too late for second-guessing Too late to go back to sleep.
Jun 3, 2014 - 8:30am

I've had most people say it is because it is tangible and easier to understand then stocks.

One girl said she started to become interested in real estate because she was currently looking to buy a house with her boyfriend.

During my interview I said that I have worked during the past summers with my dad who is an independent contractor and the idea of real estate as an investment possibility has always been intriguing to me.

Jun 3, 2014 - 8:31am

Real answer: real estate is the easiest topic in finance to grasp because it's tangible. Most people who work in real estate--commercial, residential, office, retail, private equity, IBD, commercial banking, development, etc.--are complete dumbasses (and I don't necessarily exclude myself).

Let's be honest with ourselves--the least talented among us go into real estate because the major non-real estate players in high finance probably didn't even give us an interview when we were 22 and this was the only thing we could apply for where they'd give us an interview and perhaps a $35,000/year job. Most of us will end up in dead end jobs but the few lucky/talented/risk takers among us will end up making 7 figures in an entrepreneurial role with skill sets we learned doing the grunt work.

Jun 3, 2014 - 8:36am

Suppose one were to be interviewed for Real Estate. Would an answer along the lines of "I've had exposure to this from a young age due to family affairs" be a good / appropriate response?

The plusses I have seen are the growth and return through rental income with the biggest negative being that RE is illiquid. You can easily get 3-4% price appreciation and the same or greater rental income on top of that depending on the market.

Offshore liffe
Jun 3, 2014 - 8:47am

Hilarious how people are actually personally offended by what everyone in this business already knows. It would be cognitive dissonance for me or anyone of the rest of you to believe otherwise. That doesn't mean we can't have nice careers, but I'm just pointing out the obvious. Why real estate? For most people it's because that's who called them back on their resume submission when they were 21/22 when no one else would because our university, grades, internships, etc. were not competitive for the elite jobs.

Jun 3, 2014 - 8:57am

I am in energy--not real estate--and I like it for a lot of the same reasons; it's tangible, it pays income, and risk takers are heavily rewarded [or, conversely, demolished].

I believe I understand exactly what DBC is saying. A lot of the wealthiest people in my city are in real estate or energy, and an overwhelming number of them aren't from what you'd call "target schools." Please, before you link me to a public energy firm whose CEO and chairman went to HBS, realize that a lot of the serious money in energy lies in the private/independent sector, just as in real estate, tenant rep brokers can regularly pull in seven figures having graduated in the meaty part of the bell curve from a no-name school. The fact is, in real estate and energy, if you're decently smart, good with people, and have balls, your background is largely irrelevant; in high finance, you'll likely never even scratch the surface of the industry without some sort of pedigree. I think what DBC means to say is that there are fewer gatekeepers (excluding REPE and REIB in this generalization) to the industry, thus making it more accessible to your average state school grad who doesn't have brains in his teeth.

Sorry if I'm misinterpreting you DBC, just my $0.02.

Jun 3, 2014 - 8:55am

Why limit yourself to seven figures? If you are participating in the upsides in an entrepreneur role the sky is the limit.

Too late for second-guessing Too late to go back to sleep.
Jun 3, 2014 - 8:59am

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).

Jun 3, 2014 - 9:00am

Most of the people I know are in real estate for family reasons. TBH, it's not a place where an average joe can make decent money.

The Auto Show
Jun 3, 2014 - 9:07am

This is one of those "arguing on the internet" type discussions. I've raised money for real estate funds, and yes, the managers always seem less qualified than the guys doing tech, energy, whatever. The average IQ in real estate might be less - there's a reason even retail investors thought for a long time that real estate was the perfect investment (and still do in Canada). RE is easy to understand. But I've worked with some self-made guys who were basically former gang bangers, bar managers, who pulled their act together, found a good project, raised the money, and did well. They have their "fuck you" money. I don't. So who really cares at the end of the day. "Yes, we might be dumber than you, and we may not all be HBS/Oxbridge, but we are richer than you, and happier."

Jun 3, 2014 - 9:08am

This devolved quickly. I'll try to get back on track.

I like real estate because of the interplay in actual markets (regions, metropolitan cities, mid-markets) is interesting to me. You think this zip code will improve? Why? Oh, room for biomedical engineering growth? Do we get better returns from renovating office/R&D building or building a new one? Expensive cars at the shitty apartment you drove by? Put in new flooring/appliances and jack up rents. I think that sounds like fun. Other bullets, which I think are mentioned above:

-self-capitalizing (buy some homes on the side while rents > mortgage)
-capital gains tax
-significantly safer investment
-warm, fuzzy feeling knowing someone is destroying your plumbing

Fill the unforgiving minute with 60 seconds of run. - Kipling
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Jun 3, 2014 - 9:15am

I have an interview tomorrow and this is my general answer for the question....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 new I wanted to be apart 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 its 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 strong network of professionals.

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Jun 3, 2014 - 9:20am

On a recent interview, i said

"real estate takes a bit of gumption and self confidence, b/c you're basically predicting where people will spend their money, lay their heads, and live their lives. i feel like you cant be in the business without it"

He seemed to like that response, b/c it complimented him, and lent some sexiness to his job.

Jun 3, 2014 - 9:21am

LOL, reading this old thread I can't believe how offended people were at the obvious--that those of us in real estate are generally less pedigreed and that most of us chose real estate because we couldn't get interviews or job offers in PE, IBD, etc. Seems like extremely common knowledge.

Array

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Sep 20, 2017 - 12:31am

Hi..

Many people want to grow their career in Real Estate because it is beneficial for various reasons. In this field, a person can gain a commission and also develop his own flexible schedule. In real estate person must be a quick learner and must have the ability to learn different techniques so that he can accomplish the requirements needed should not be difficult and he will get easy entry into real estate. Part-time job holders also work in real estate because of flexible time schedule. Various successful real estate business owners have the ability to grow their company to almost any size.

Real Estate Marketing

Nov 6, 2017 - 5:43am

Why Real Estate is Special? (Originally Posted: 08/05/2015)

Hi everyone,

I don't understand why real estate draws so much attention. For example, private equity, such as Blackstone, has a group just focus on real estate. Many BB also have a group call real estate. Also on Wall Street Journal, "Real Estate" is an independent section, not under "business" section, which other industries do. Just wondering why real estate deserves a special place? What is so special about this industry?

Nov 6, 2017 - 5:48am

The entire market cap of the U.S. stock market is in the neighborhood of $24 trillion. The total value of all U.S. homes--just homes--is about $26 trillion. The U.S. has A LOT of real estate assets.

Array

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Nov 6, 2017 - 5:50am

Like anything that produces cash-flow, Real Estate does and many financial instruments are derivable from cash-flows it produces offering investors a very attractive yield and overall IRR (this excluding all the things a banker can do with the debt). Real Estate is one of the few asset classes that you can feel, smell, touch, and live....and this also plays a psychological role in everyone's mind- its not like it will evaporate if some asset manager makes one mistake or a wrong pick one day.

Nov 6, 2017 - 5:52am

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