Description
Real estate investors buy and sell own real estate such as apartments, dwellings, land and non-residential buildings to make a profit. They might actively invest in these properties to increase its value by repairing, renovating or improving the facilities available. Their other tasks may include researching the real estate market prices and undertaking property research.
Duties
The duties of a real estate investor typically include, but are not limited to:
- Finding potential properties to buy through research, such as analyzing market trends or studying tax records to identify potential undervalued properties
- Negotiating with sellers to obtain the best price possible for a property
- Managing the purchase process from beginning to end, which may involve obtaining financing for the purchase
- Performing inspections of properties to ensure they meet standards for habitability, including structural integrity and environmental hazards such as termite infestations
- Evaluating the financial status of potential investments, including analyzing income potential, expenses, and other factors that affect the potential return on investment
- Conducting research on market conditions in an area to determine whether a potential investment will be profitable
- Coordinating with contractors to perform renovations on properties as needed
- Developing marketing plans to attract potential renters or buyers to properties
- Coordinating with attorneys to ensure legal compliance for all transactions
Other titles
The following job titles also refer to real estate investor:
real estate entrepreneurs
real estate investing expert
land investor
land entrepreneur
investor in real estate
property entrepreneur
property investor
real estate entrepreneur
Working conditions
Real estate investors typically work long hours, including evenings and weekends, to find properties, negotiate deals, and oversee repairs and renovations. They also spend time meeting with clients, lawyers, and other professionals.
Some real estate investors work for a real estate company, while many others are self-employed. Many real estate investors are involved in more than one real estate transaction at a time and must juggle multiple deadlines. The work can be stressful and demanding, but also exciting and well rewarding.
Minimum qualifications
While there are no real estate investor degree requirements, many investors choose to pursue a bachelor’s degree in real estate or finance. These programs offer courses in topics like finance, accounting, economics, business law and real estate law.
Real estate investors often have a solid background in real estate. They may have worked as a real estate agent, property manager or in another real estate-related role. They may have experience in sales or business administration. Some real estate investors also have experience in other industries, such as finance or law.
ISCO skill level
ISCO skill level is defined as a function of the complexity and range of tasks and duties to be performed in an occupation. It is measured on a scale from 1 to 4, with 1 the lowest level and 4 the highest, by considering:
- the nature of the work performed in an occupation in relation to the characteristic tasks and duties
- the level of formal education required for competent performance of the tasks and duties involved and
- the amount of informal on-the-job training and/or previous experience in a related occupation required for competent performance of these tasks and duties.
Real estate investor is a Skill level 3 occupation.
Real estate investor career path
Similar occupations
These occupations, although different, require a lot of knowledge and skills similar to real estate investor.
real estate surveyor
property appraiser
property acquisitions manager
letting agent
foreclosure specialist
Long term prospects
These occupations require some skills and knowledge of real estate investor. They also require other skills and knowledge, but at a higher ISCO skill level, meaning these occupations are accessible from a position of real estate investor with a significant experience and/or extensive training.
bankruptcy trustee
property developer
personal trust officer
securities analyst
actuarial consultant
Essential knowledge and skills
Essential knowledge
This knowledge should be acquired through learning to fulfill the role of real estate investor.
- Banking activities: The broad and continuously growing banking activities and financial products managed by banks ranging from personal banking, corporate banking, investment banking, private banking, up to insurance, foreign exchange trading, commodity trading, trading in equities, futures and options trading.
- Real estate market: The trends concerning the buying, selling, or renting of property, including the land, buildings, and natural resources encompassed within the property; the categories of residential properties and properties for business purposes which such properties are traded in.
- Property law: The law and legislation that regulates all the different ways to handle property, such as the types of property, how to handle property disputes and property contract rules.
- Modern portfolio theory: The theory of finance that attempts to either maximise the profit of an investment equivalent to the risk taken or to reduce the risk for the expected profit of an investment by judiciously choosing the right combination of financial products.
Essential skills and competences
These skills are necessary for the role of real estate investor.
- Collect property financial information: Collect information concerning the previous transactions involving the property, such as the prices at which the property had been previously sold and the costs that went into renovations and repairs, in order to obtain a clear image of the property’s value.
- Provide cost benefit analysis reports: Prepare, compile and communicate reports with broken down cost analysis on the proposal and budget plans of the company. Analyse the financial or social costs and benefits of a project or investment in advance over a given period of time.
- Estimate profitability: Take various factors into account to calculate the cost and potential revenues or savings gained from a product in order to evaluate the profit that could be generated by the new acquisition or by a new project.
- Maintain records of financial transactions: Collate all the financial transactions done in the daily operations of a business and record them in their respective accounts.
- Obtain financial information: Gather information on securities, market conditions, governmental regulations and the financial situation, goals and needs of clients or companies.
- Examine the conditions of buildings: Monitor and assess the conditions of buildings in order to detect faults, structural problems, and damages. Assess general building cleanliness for grounds maintenance and real estate purposes.
- Value properties: Examine and evaluate land and buildings in order to make valuations about their price.
- Compare property values: Obtain information on the value of properties comparable to a property which is in need of valuation in order to make more accurate appraisals and assessments, or to set or negotiate the price at which the property can be sold or leased.
- Perform property market research: Research properties in order to assess their usefulness for real estate activities, using various methods such as media research and visitation of properties, and identify the potential profitability in the development and trading of the property.
- Handle financial transactions: Administer currencies, financial exchange activities, deposits as well as company and voucher payments. Prepare and manage guest accounts and take payments by cash, credit card and debit card.
Optional knowledge and skills
Optional knowledge
This knowledge is sometimes, but not always, required for the role of real estate investor. However, mastering this knowledge allows you to have more opportunities for career development.
- Energy performance of buildings: Factors that contribute to lower energy consumption of buildings. Building and renovation techniques used to achieve this. Legislation and procedures regarding energy performance of buildings.
- Building codes: The set of guidelines that determine the minimum standards for buildings and other constructions in order to protect public health and safety.
- Project management: Understand project management and the activities which comprise this area. Know the variables implied in project management such as time, resources, requirements, deadlines, and responding to unexpected events.
- Cadastral taxation: The taxation legislation concerning real estate and real property’s metes-and-bounds of a community.
- Actuarial science: The rules of applying mathematical and statistical techniques to determine potential or existing risks in various industries, such as finance or insurance.
- Tax legislation: Tax legislation applicable to a specific area of specialisation, such as import tax, government tax, etc.
- Concurrent estate: The concept in property law which stipulates the rights and duties of two parties co-owning a property, and the various ways in which co-tenancy is possible.
Optional skills and competences
These skills and competences are sometimes, but not always, required for the role of real estate investor. However, mastering these skills and competences allows you to have more opportunities for career development.
- Trace financial transactions: Observe, track and analyse financial transactions made in companies or in banks. Determine the validity of the transaction and check for suspicious or high-risk transactions in order to avoid mismanagement.
- Attend trade fairs: Attend exhibitions organised to enable companies in a specific sector to demonstrate their latest products and services, study the activities of their competitors, and observe recent market trends.
- Negotiate with property owners: Negotiate with owners of properties who wish to rent or sell them in order to obtain the most beneficial agreement for the potential renter or buyer.
- Communicate with banking professionals: Communicate with professionals in the field of banking in order to obtain information on a specific financial case or project for personal or business purposes, or on behalf of a client.
- Supervise property development projects: Supervise the operations of new projects relating to property development, such as renovation, re-leasing, purchasing of land, building projects, and sale of improved properties. Ensure that the operations are profitable, occur in a timely manner, and are compliant with regulations.
- Prepare inventory of properties: List all the items present in a property building which is leased or rented, in order to have a contractual agreement between the owner and the tenant.
- Provide information on properties: Provide information on the positive and negative aspects of a property and the practicalities concerning any financial transactions or insurance procedures; such as location, composition of the property, renovation or repair needs, the cost of the property and the costs related to insurance.
- Plan buildings maintenance work: Schedule maintenance activities of property, systems and services to be deployed in public or private buildings, according to the priorities and needs of the client.
ISCO group and title
3334 – Real estate agents and property managers
References
- Real estate investor – ESCO
- Real Estate Investor Job Description: Salary, Duties, & More – Climb the Ladder
- Featured image: By Reza Abbaszadeh – Own work, CC BY-SA 4.0