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Why taking a real estate course is one of the best decisions of my life

Why taking a real estate course is one of the best decisions of my life

At some point in our lives, we all have to buy a home to live in. Buying a home can be a stressful process given that it will be one of the biggest purchase of your life. Hence, the more you understand about real estate, the better you are in making well-informed decisions. You also run less risk of overpaying and you are also better able to spot any defects during the viewing process.

Also, I believe real estate is an asset class that makes a good investment, whether is it in the form of buying a physical property for investment, or investing in REITs (Real Estate Investment Trust). It can also diversify your assets against the usual equities, bonds and fixed deposits.

Hence, before I turn 30 next year, I’ve always wanted to sign up for a real estate course and finally did so during this work-from-home period where lessons held are all online. This save me a lot of time from the need of going down to the training centre itself if not for the current pandemic.

I signed up for an 18-days course that runs for 3 hours each night from a property learning centre called Hastor, and never regretted my decision even though I had to put in the commitment after work. I recommend everyone who is keen on learning more about real estate to take a course under them.

Below shows a comprehensive syllabus of what was went through during the entire duration of the course.

CEA

Source: Council for Estate Agencies

Below shows a summary on why this course is so useful.

A. Real estate is more than just residential properties. You get to learn more about Industrial and Commercial properties as well

real estate 1

Source: The Balance. Back to basics.

When it comes to real estate, most people (I’m referring to you and I, and not those big institutional players) are only versed in residential and they only focus on one type of the real estate market.

However, there are more to it such as commercial and industrial properties. And such types can also offer pockets of investment opportunities given that not all real estate types move in the same direction at the same time.

Commercial real estate includes offices, retail shopping centers and strip malls, medical and educational buildings, and hotels. They are mainly used by businesses to carry out their operations.

office building

Source: Unsplash. Office buildings.

Industrial real estate includes factories, manufacturing buildings and property, as well as warehouses. The buildings can be used for research, production, storage, and distribution of goods. The classification is important because the zoning, construction, and sales are handled differently.

industrial

Source: Unsplash. Warehouse.

For example, if you are a real estate salesperson focusing on commercial and industrial real estate and you know that rental is increasing year-on-year for certain properties, you can buy into the specific REITs before the share price goes up as you know that the increased in rental will provide for the increase distributions for the REIT. This allows you to be ahead of the market.

 

B. You learn how to better choose a home

Real estate is a tangible asset. It is something that you can see and feel. You have to be on the ground checking your surroundings and inspecting the place before you buy a home. There are so many micro factors which can affect your decision making and these includes the below:

  • Location: Location is almost always the number factor in choosing a home. Certain locations are always higher in demand than others (eg. Central Core Region vs Outside of Core Region)
  • Tenure: In Singapore, most people prefer buying freehold units compared to leasehold units if possible
  • Condition: Units that are newly renovated or refurbished are more favorable than older ones
  • Accessibility: Units that are near MRT or bus stops are more sought after
  • Schools: Units that are within 1km of “Brand name” schools are more popular as well. (Think of Bishan, Ang Mo Kio etc)
  • Environment: Quiet and less populous environments are generally favoured

Once you have decided on a home, you also learn how to finance your home whether is it by using Bank Loan or HDB Loan. This can make a difference because HDB Loan’s at current point of writing is 2.6% whereas Bank Loan is ~1.5%. That 1.1% difference can amount to a significant amount over time.

 

C. You learn more about real estate markets and how to invest in real estate investments 

Real estate typically is a lagging market as compared to the stock market. If you noticed from the below charts, you can see that the URA Non-Landed Residential Price Index lags the Straits Times Index (STI) in periods such as the Asian Financial Crisis, Dotcom Bubble, and Global Financial Crisis. With this in mind, you are able to anticipate a downturn of the real estate market and exit it before it turns for the worse.

IMG_2721

Source: Hastor, Mdm Celeste Ng. 

 

D. It increases your career options 

In my previous post on what I want to achieve before 30, I briefly talked about obtaining a real estate salesperson licence. Taking this course is a pre-requisite for taking the real estate salesperson exam.

Once you passed the exam and obtained your licence, you will have more options in the below roles given that the licence is well-recognized and passing rate for each exam is only 20-30%. That is lower than the average passing rate of CFA exam takers at ~46%!

So count that as an achievement (:

RE jobs

Source: Finance and Toast

 

To sum it up, taking this real estate course has really been one of the highlights of this year. It not only made me more interested in understanding about the real estate market, but it also made me more confident when it comes to buying a home.

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Cheers,

Finance and Toast



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