So, you’ve applied to be a real estate analyst and been asked to take a modelling test. There’s no need to be nervous!

Modelling tests are a great opportunity to showcase your skills and impress your future employer. With just a little bit of preparation, you’ll be able to breeze through the test with flying colours.

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What is a real estate analyst modelling test?

A real estate analyst modelling test is a type of exam that assesses your ability to build a financial model for a given property. The model will be used to evaluate the potential investment return of the property.

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How to pass a real estate analyst modelling test: Step-by-Step

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1. Understand the requirements of the test

Before you start building your model, it is important that you understand the requirements of the test. What type of property are you modelling? What is the timeframe of the investment? What are the assumptions that have been provided? Knowing the answers to these questions will save you time and help you build a more accurate model – we’d recommend popping all of this information into an “assumptions” tab that you can easily refer (and link!) back to later.

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2. Choose the right software

There are many software programs that can be used to build financial models, but not all of them are equally well suited for real estate modelling. Excel is the most popular choice, but Google Sheets or another program may be required by the company administering the test. Choose the software that you are most comfortable with so that you can focus on building an accurate model instead of struggling with unfamiliar software.

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3. Gather data

In some tests, you may be required to gather data for the model yourself. This might include data on the property itself, such as square footage, location, age, etc., as well as market data on comparable properties and macroeconomic data for the region or country where the property is located. The more data you have, the more accurate your model will be. However, be careful not to overload your model with too much data; this can make it difficult to interpret and can lead to errors. Plus this can be very time-consuming when you have a limited amount of time to take the test.

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4. Build your model

Now it’s time to start building your model! Begin by creating a template in your chosen software program; this will make it easier to input data and make changes later on. Next, input all of the data that you gathered in Step 3 into your model. Be sure to reread the instructions and carefully check your work for errors; even a small mistake can invalidate your results. You could even run a sense check on your model (ie do a back-of-the-envelope calculation) to make sure it is working as you expect it to.

Make sure when you build the model that you present everything clearly and tidily so that it is easy for the examiner to read and understand. Plus if you run out of time, the examiner will be able to interpret how your model might have ended up.

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5. Interpretation & Conclusion

In order to stand out from the crowd, we’d highly suggest that you interpret your results and write a conclusion summarising your findings, even if they haven’t asked you to. As a future part of the team, they will value your thoughts and feelings on whether an investment is worth pursuing.

If everything looks good, congrats—you’ve just passed a real estate analyst modelling test!

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Analyst modelling tests can be tricky, but with careful planning and execution, they’re definitely manageable! Just remember these key tips: understand the requirements of the test; choose the right software; gather data; build your model; interpret your results; and write a clear conclusion summarising your findings. With these guidelines in mind, you’ll be well on your way to impressing any potential employer with your stellar real estate analysis skills!

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If you want additional tips on how to pass a modelling test - check out our mini-course here: https://excelinproperty.thinkific.com/courses/how-to-pass-a-modelling-test or book in a 121 coaching session with the Excel in Property team.