Investing in online MBA classes in real estate management and investing might be key to profiting from the current environment. Find an online MBA program. Home prices are low in most of the United States at the present time. Fixed rate Mortgages for 30 and 15 loans are hovering at 4% and 3%, respectively. This is an excellent time for investment for those that understand the metrics of this market. This is where an MBA in real estate investment would be handy.
A degree of this type prepares potential investors to perform analyses such as cash flow analysis.
Cash flow analysis determines not just how much income can be expected from a particular piece of property; it also determines how much of a particular building must be rented to cover its holding and administrative costs. Some of the concepts that one must understand in order to perform cash flow analyses include: net operating income (NOI) or how much it costs to maintain and run a particular building; internal rates of return (IRR) or how much “profit” that a rental is earning an investor, net present value (NPV) or the value of the money today at the current value of the dollar, residual value or how much a building is worth after depreciation is subtracted, debt service or how the cost of borrowed money, depreciation and capital gains or the taxes to be paid after holding the building for varying lengths of time.
In addition to monetary analysis, any person considering investment must be familiar with tax, zoning, occupancy and other laws. Real estate management is another area that an MBA covers. MBAs in real estate property management cover a wide variety of topics. Example of MBA in Real Estate Management Those who manage property must know contract law. They must know laws that cover the landlord-tenant relationship. They must know the laws that govern contracts between landlords and service providers/maintenance people. They must know banking law as relates to loan service, foreclosures and the lien/loan processes. This is a highly complex area of real estate.
Not only is this an excellent time to be acquiring these skills and investing in real estate projects, it is a good time to buy land for development. While loans for development might be scrutinized more closely at the present time, the extremely low interest rates make it a very attractive proposition. Land is also relatively inexpensive at present due to falling demand. There are a number of excellent MBA programs for real estate development including some for green building/green development.