Are you a young adult trying to find a reliable career path for yourself? Nowadays, the real estate sector is booming and is often considered a profitable and secure career path for youngsters and growing adults. If you are interested in working in real estate without having to invest your own money, real estate investment trusts are a lucrative and profitable career path for you to consider.
Real estate investment trusts are among the fastest-expanding sectors in the property and financial industry. In recent years, the industry has mushroomed as more and more people are realising the importance of owning a home amidst the rising inflation and recession. Working in the real estate sector is a beneficial career path with plenty of opportunities for monetary gain. This is where REITs come in. In layman’s terms, REITs are highly regulated organizations that own, operate, or finance properties instead of stocks to generate revenue for investors.
REIT stands for real estate investment trusts and these types of organizations buy and sell properties on behalf of a group of investors. While REITs have been around since the 60s, they have blossomed over the last few years and transformed into an amazing career path for young adults and working professionals alike.
In this blog, we will answer the question of is real estate investment trusts a good career path or not. We will also highlight and discuss the various types of REITs you can work with, the qualifications required to work for a REIT and analyze the overall potential of this sector.
Let’s dive in.
What are REITs?
As mentioned above, REITs are companies or investment firms that generate revenue for investors via real estate instead of shares or stocks. Nowadays, many apartment complexes, commercial buildings, offices, and other properties are owned by REITs. However, the properties owned by a REIT have to be carefully monitored to maximize the potential of earning for the investors.
While most REITs are publicly traded, many companies that own real estate for the investors manage the property. This allows investors to invest in multiple properties without having to go through the hassle of managing or maintaining the property. The stocks are traded on a stock exchange similar to other publicly traded companies. Typically, there are three types of REITs- Equity, Mortgage and Hybrid.
Different Types of REITs
The most common types of REITs include Equity, Mortgage, and Hybrid. However, there are also other types of real estate investment trusts that offer steady and high dividend income along with long-term capital appreciation.
Equity REITs typically pay 100% of their income to their investors. These companies either manage the property themselves or subcontract the management duties to another firm. Equity REITs generate revenue from the rents paid on their owned properties and income from selling the real estate.
If you’re wondering whether real estate investment trusts are a good career path, equity REITs offer high-paying careers in leasing, investment analysis, property management, and asset management.
Mortgage REITs generate revenue by purchasing and managing mortgages on commercial properties. The revenue is primarily generated by calculating the difference between the earned interest on mortgage loans and the cost incurred by funding loans.
If you are interested in risk management and real estate finance, a career in Mortgage REITs is the ideal option for you. This role demands a keen eye for identifying potential risks and returns.
Retail REITs typically own and manage commercial and retail spaces in properties. This mainly includes shopping complexes, malls, power centres, outlet centres, etc. These companies sell retail spaces in their properties after leasing them to tenants. Retail investors can earn hefty returns as they can sell the rented retail space at an increased value, depending on the rent of the retail space.
These types of REITs manage, operate, and own residential rental properties. Residential real estate investment trusts also manage manufactured housing that promises good returns over a particular period of time. However, with every type of investment, these real estate investment trusts often involve financial risks such as housing market risk, oversupply risk, and interest rate risk.
Office real estate investment trusts are among the best for providing a stable income. One of the best features of Office REITs is that they don’t have any drawbacks. The tenants of properties owned by office REITs sign a long-term lease agreement, which is why it is recommended to hold investments in office hubs. However, office REIT returns are dependent on the state of vacancy rates, unemployment, and the state of the economy.
As the name suggests, Healthcare Real estate investment trusts invest in properties like hospitals, clinics, assisted living facilities, and surgery centres. These REITs depend on healthcare funding and are one of the best options for long-term growth.
Hybrid REITs manage and operate properties but outsource the finance through preferred equity or debt. It is the perfect blend of equity and mortgage real estate investment trusts. This enables the company to focus on its objective of generating income from rents and also reduces taxes. Talk about killing two birds with one stone. The dividends are primarily earned on rental income, capital gains, and interest from mortgages.
If you are interested in gaining exposure in the finance and real estate industry, a career in a Hybrid real estate investment trust is the best option for you. You will have a chance to gain knowledge and learn about real estate financing and property management.
Why Are Real Estate Investment Trusts a Good Career Path for You?
Are you interested in pursuing a career in real estate investment trusts? If that’s the case, REITs offer a career path that’s challenging yet incredibly rewarding and profitable. It perfectly blends the world of real estate with finance and offers high profitability. Let’s take a look at why REITs is a good career path for you.
Diversified Real Estate Investments
Unlike physical real estate investments, REITs allow investors to invest in a wide range of properties ranging from apartment complexes to shopping malls to even hospitals. With REITs, you can invest in a broad range of real estate and also broaden your portfolio simultaneously. While the real estate sector is incredibly challenging, it also helps in building a broad skill set and offers high returns to investors.
Property Issue Expertise
Working with REITs also helps you expand your skill set and allows you to hone your skills in property management. When working with a real estate investment trust, you will have to tackle various challenges like maintenance issues, legal problems, tenant disputes, and more. It is one of the best options to build and expand your skill set and gain expertise in the real estate and financial sector.
Equity Market Application
Similar to other publicly traded companies, REITs are also traded on the stock exchange. Pursuing a career in REITs will also help you to learn the ins and outs of the equity markets and wealth appreciation. Overall, REITs are a viable career option if you are planning to expand your skill set and earn high returns simultaneously.
Steps to Pursue a Career in Real Estate Investment Trusts
If you are interested in pursuing a career in real estate investment trusts, you will need specific qualifications and experience. Here’s how you can start your career in REITs properly-
Education and Qualification- Relevant degrees and specialized knowledge and training in finance, real estate, and accounting are preferred for many REIT professions.
Build a Network and Acquire Experience- Acquire relevant experience and exposure by pursuing internships and entry-level jobs. It will also help you to connect and build networks with industry leaders and influential figures in the industry.
Job Searching- The key to landing a job in REITs is to know where to look for jobs and how to present yourself as a valuable asset. You can use job-searching resources like professional associations with job boards to narrow down your search and land a suitable job best for your skill set.
By following these steps, anyone with the required degrees and skills can pursue a career in REITs. In this age, real estate investment trusts are a good career path for youngsters who are looking to acquire skills and earn a substantial amount.
Real Estate Investment Trusts Career Paths
There are a plethora of jobs within the REIT industry that can be an excellent career path for you. It is important to learn all about the various jobs available in real estate investment trusts before you penetrate the industry. Here is a list of the best-paying jobs in the REIT sector.
Property Manager is one of the most sought-after and high-earning positions worldwide in the real estate sector. They are responsible for managing the day-to-day operations of particular properties. Moreover, they are also adept in customer service and ensure that the business is running smoothly. It is a high-paying job with tons of benefits and is an ideal career path in the REIT sector. If you have an opportunity to become a Property Manager, grab this career opportunity in the world of real estate investment trusts.
Average Salary: $60,000
Asset Managers are responsible for the performance of the assets in your portfolio. They monitor the investors’ assets and replace sinking assets with better options that offer high potential for growth. They are also responsible for supervising property operations to ensure that the expenses align with future revenue projections.
Average Salary: $115,000
Acquisition Analysts have a wide skillset and are experts in sectors like finance, marketing, and trading. They are responsible for locating any new investment opportunities and helping the REITs diversify and grow their portfolio. As an acquisition analyst, your main liabilities include identifying potential acquisition targets, preparing and managing agreements, and negotiating buying/selling prices.
Average Salary: $75,000
The primary role of a Development Executive is to help their company make decisions that maximize their revenue and earnings. They are also called investment analysts and work with different contracts and subcontractors. Development Executives are also responsible for financing the development of properties. It is primarily a field job that includes both managerial and non-managerial responsibilities.
Average Salary: $95,000
The primary responsibility of a REIT analyst is to study the market trends and provide advice on investment decisions. A REIT analyst studies the economic conditions of the market and predicts future growth of different investment opportunities. They are solely responsible for determining whether an investment opportunity will be profitable in the long run and provide huge returns to investors or not.
The role of a Financial Analyst includes crafting financial models that maximize returns, assisting in financial decision-making, and evaluating the financial condition of the REIT. If you’re skilled in finance and formulating strategies to increase revenue, this is one of the best real estate investment trust career paths for you.
Average Salary- $97,000
Investor Relations Manager
An investor relation manager acts as a mediator between the investors, potential shareholders, and financial analysts to ensure proper communication. They are responsible for maintaining a smooth and seamless communication channel between the concerned parties to ensure all operations are carried on properly.
Average Salary- $150,000
These are some of the highest-eaning jobs if you are looking to pursue a career in Real Estate Investment Trusts. In this age, REITs are one of the best career options for people who are well-versed in finance and have a thorough understanding of how the real estate market works.
Is a Career in REITs the Right Option for You?
If you are interested in real estate and finance, a real estate investment trust is a good career path for you. However, this role requires having a thorough understanding of the real estate market and financial management. If you are a person who loves to tackle challenges and is adept at formulating solutions, you can build a substantial career and earn hefty returns in the REIT sector.
Is real estate investment trust a good career path for you? The answer will vary depending on each individual. We have listed the various types of jobs available in this sector. Consider the pros and cons of the roles available and find the perfect option according to your skill set.
However, it is also important to note that REITs are not a shortcut to achieving success overnight. Each career path requires starting small and working your way up by proving your worth and using your knowledge to climb the corporate ladder.
In conclusion, if you are able to handle the responsibilities and able to work with finances and numbers, this field might be the ideal option for you.
Frequently Asked Questions(FAQs)
Ans. The answer to this question ultimately depends on your preferences and skills. If you are someone who is interested in working with real estate and is good at financing, you can hope to earn a substantial amount in this field.
Ans. REITs offer a ton of job opportunities for freshers as well as experienced working professionals. Some of the best job opportunities include-
Investor Relations Manager
Ans. It is expected that cap rates will increase across the REIT index in 2023. However, some sectors will be more affected than others. For example- Office REITs may witness a decline in valuation as hybrid working becomes the norm.