Is an MBA in Real Estate Worth It? That Depends On Where You Study

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:

• What is an MBA in Real Estate?
• What kinds of people typically pursue this degree?
• What can I do with an MBA in Real Estate?
• How much can I earn with this degree?
• Where can I find the best MBA in Real Estate programs?
• Are online MBA in Real Estate programs worth it?
• Do MBA graduates earn more than graduates of MSRE programs?
• Should I be worried about lost income if I take time off for school?
• Is an MBA in Real Estate worth it?

What is an MBA in Real Estate?

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:

• Advanced Real Estate Finance: This course delves into complex financial concepts and analytical methods used in real estate. Topics may include mortgage securitization, real estate investment trust (REIT) analysis, and advanced cash flow modeling.
• Business Strategy: This course explores strategic decision-making in business, with a focus on creating and sustaining competitive advantage. Real estate students might learn about market analysis, business planning, and strategy implementation in the real estate context.
• Data to Decisions: This course emphasizes the use of data in making informed business decisions. It likely covers data analysis, interpretation, and application in real estate market analysis, property valuation, and investment decisions.
• Economics for Managers: This course provides an understanding of economic principles and their application in business decisions, including market dynamics, pricing strategies, and economic forecasting in the real estate sector.
• Ethics, Integrity, and Society: This course focuses on ethical decision-making in business. In real estate, it might cover topics like ethical dilemmas in property development, corporate social responsibility, and legal compliance.
• Financial Accounting: This course covers the fundamentals of financial accounting, including balance sheets, income statements, and cash flow analysis, with applications in the real estate industry such as property accounting and REIT financial statements.
• Integrated Company Analysis: This course involves a comprehensive analysis of companies, combining aspects of finance, accounting, strategy, and marketing. In real estate, it might focus on analyzing real estate firms or developers.
• Introduction to Financial Management: This introductory course covers basic financial management principles such as capital budgeting, financial analysis, and risk management, with applications in managing real estate investments.
• Leading and Working in Teams: This course focuses on leadership and teamwork skills, essential for real estate projects which often involve collaboration among diverse groups of professionals.
• Marketing Management: This course examines marketing strategies and practices. In real estate, it could focus on property marketing, market segmentation, and branding strategies for real estate firms.
• Operations Management: This course involves the study of efficient and effective operation of business processes. In real estate, it could include property management, facilities management, and project management.
• Real Estate and Investment: This course explores real estate as an investment asset class, covering topics like property investment strategies, portfolio management, and risk assessment.
• Real Estate Capital Markets: This course focuses on the role of capital markets in real estate, including the study of debt and equity markets, REITs, and mortgage-backed securities.
• Real Estate Law: This course covers legal aspects of real estate, including property rights, contracts, land use regulations, and real estate transactions.
• Techniques in Real Estate Valuation: This course focuses on methods for valuing real estate properties, including comparative market analysis, income approach, and cost approach.
• Urban Economics: This course studies the economics of urban areas, including urban development, land use patterns, and the impact of public policy on urban real estate markets.

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.

What kinds of people typically pursue this degree?

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.

What can I do with an MBA in Real Estate?

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:

• Acquisitions, identifying property or development opportunities, and buying real estate assets in line with criteria set by portfolio managers.
• Asset management and portfolio management for a real estate firm, investment bank, real estate investment trust, or the real estate arm of a major corporation.
• Commercial or residential development, conducting financial and market analysis, and/or valuation and feasibility analysis, or overseeing project budgets.
• Lending and financing, handling commercial mortgage-backed securities, construction lending, or mezzanine financing.
• Public policy, dealing specifically with the issues surrounding urban economic development and working with investors, developers, politicians, and community members.
• Real estate advisory or consulting, helping others grow, analyze, or manage real estate assets.
• Real estate finance, overseeing broader financial functions for firms that own, develop, finance, or back property projects.

How much can I earn with this degree?

At first glance, the average salary associated with earning an MBA in Real Estate—$111,000, 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 $97,000. 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.

Where can I find the best MBA in Real Estate programs?

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:

• Cornell University’s SC Johnson College of Business
• Columbia University’s Columbia Business School
• Georgia State University’s J. Mack Robinson College of Business
• New York University (NYU)’s Stern School of Business
• Northwestern University’s Kellogg School of Management
• University of California – Berkeley’s Haas School of Business
• University of California – Los Angeles’s Anderson School of Management
• University of Pennsylvania’s Wharton School of Business
• University of Wisconsin – Madison’s Wisconsin School of Business

Are online MBA in Real Estate programs worth it?

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:

• Colorado State University – Fort Collins College of Business
• Florida State University College of Business
• George Washington University School of Business
• Saint Joseph’s University’s Erivan K. Haub School of Business
• University of Florida’s Hough Graduate School of Business
• University of North Carolina at Chapel Hill’s Kenan-Flagler Business School
• University of Washington’s Michael G. Foster School of Business

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.

Do MBA graduates earn more than graduates of MSRE programs?

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 $79,000, 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.

Should I be worried about lost income if I take time off for school?

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.

Is an MBA in Real Estate worth it?

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.

(Updated on January 11, 2024)

Questions or feedback? Email editor@noodle.com