Is Real Estate Investment Trusts a Good Career Path? (Updated 2024)
Real estate investment trusts are investment vehicles that allow people to hold a part of the diversified portfolio, including commercial and residential leases. However, “Is real estate investment trusts a good career path?” is the main question that arises here. Let’s discuss this in detail.
When constructing a fixed income portfolio or any equity, real estate investment trusts should be a must! This is an investment fund or security that invests in income-generating properties of real estate. The fund is owned by a company of shareholders.
Real estate investing can be a good career path, but for choosing this, there are several criteria that need to be fulfilled as there are many requirements for the same.
What Are Real Estate Investment Trusts (REITs)?
According to Indeed, “A real estate investment trust (REIT) is a type of investment vehicle that owns and manages income-generating real estate properties, such as apartment buildings, shopping centers and office complexes. Investors can buy shares in a REIT and receive a portion of the rental income generated by the underlying properties.”
Basically, the shareholders of a given REIT receive 90% of the REIT’s taxable income. Here, the REIT shares its taxable income in the form of dividends. Hence, investing in REIT is an attractive form of investment. This form of investment is great for people who want to seek a regular income. Apart from that, there are various other diversification benefits of REITs, and you can trade them like stocks on major exchanges.
Question: Is Real Estate Investment Trusts A Good Career Path?
Google Answer: According to Google and the majority of reviews, real estate investment trusts a good career path. However, qualifying for this is not everyone’s cup of tea. There are requirements that you need to pass from, and these are discussed below:
- Must have at least 100 shareholders
- Your firm should be handled by trustees or a board of directors.
- You must invest at least 75% of your total assets in real estate.
- Obtain at least 75% of its gross income from rents, sales or real estate, and much more.
- The firm must pay at least 90% of its taxable income as shareholder profits each year.
- Be an entity that is taxable as a corporation.
What Are the Benefits of Having a Career in REITs?
If you are an entry-level real estate or financial employee, then starting at a REIT can be a great career option for you. Even if you are a senior professional, you have a lot of chances for growth in the REITs sector. The following are the biggest benefits of working in an REIT:
- Better Compensation: Generally, there are competitive compensation packages in REITs. These include salaries, bonuses, and other professional benefits like health insurance, paid time off, and retirement plans.
- Better Opportunities for Growth: In most cases, REITs have multiple departments, and one company is present in multiple locations. Hence, the employees of the company get enough chances for career development and growth. This further leads to professional advancement as well.
- More Stability: As compared to other real estate companies, REITs are relatively more stable. This is because REITs generate a steady rental income from their properties. Hence, REITs are less vulnerable to fluctuations in the market.
- Work-Life Balance: There are various work-life balance initiatives with REITs. These come in the form of flexible schedules and options to work from remote locations. As a result, employees have the chance to achieve a better balance of personal and professional lives.
- More Positivity: Most REITs focus on creating a more positive impact on the lives of their employees and also the community as a whole. Hence, certain REITs bring on sustainability initiatives, community engagement programs, and affordable housing.
What Are The Different Types Of Real Estate Investment Trusts (REITs)?
Is real estate investing a good career? Yes, it is. Investing in this career path can provide you numerous benefits such as a high number of jobs that will surely capture your attention for a while. Now, let’s discuss the different types of real estate investment trusts (REITs) that concluded as a good career path in 2024.
1. Mortgage REITs
Mortgage REITs provide financing for income-producing real estate by originating or purchasing mortgages and earning income from the interest on these investments. According to the reports, mortgage real estate investment trusts help finance 1.8 million US homes.
This investment trust holds MBS and mortgages on their balance sheets and funds these investments with equity and debt capital. The majority of mortgage REITs are registered with the SEC and are required to publish regular financial statements for monitoring and review by analysts and investors.
2. Retail REITs
Retail REITs are a part of investment trusts that owns and manages retail properties in upmarket areas and central business districts. It leases the retail space to tenants looking to set up boutiques, grocery stores, and shopping malls.
This investment trust renders investors with a chance to earn good returns since the retail properties value over time. This company can manage and develop the property via a team of experienced real estate managers.
3. Residential REITs
A residential REIT is a real estate investment trust that holds and operates rental properties. They produce impressive total returns over time. But keep in mind, assets with good returns are not far from high risks that include housing market risk, financing risk, oversupply risk, and interest rate risk.
The three types of largest residential REITs are American Campus Communities, American Homes 4 Rent, and Avalonbay Communities. Thus, residential REITs help you to own a piece of an apartment building.
4. Healthcare REITs
Real estate healthcare investment trusts invest in a variety of property types such as surgery centers, hospitals, and assisted living. Healthcare REITs are one of the most attractive for long-term growth.
These are the excellent choices in the United States and thus increasing rapidly. This is directly involved in the development of healthcare facilities.
5. Office REITs
Without too much downside, Office REITs is regarded as the best way to add growth potential and generate steady income to your portfolio. This is a special classification of corporations and consists of operating, owning, and managing real estate assets.
These investments are in the office buildings and get income from the rents. Thus, investors often consider office investment trusts to be a good investment, and you can consider this in 2024.
What Skills Do You Need to Work in REITs?
There are certain real estate skills you need to master to get into a REIT career. However, the skill you choose might change as per the career you choose. Here are the major skills you need to be in REITs:
- You must be able to do financial analysis, and be able to assess financial statements.
- A career in REITs will require you to think strategically and create investment plans for the company that you work for.
- Since you have to deal with multiple parties, you will need to have good communication skills and negotiation skills.
Pros And Cons Of Real Estate Investment Trusts
“Is real estate investment trusts a good career path?” There are some pros and cons of real estate investment trusts, and you need to consider them beforehand.
Pros:
- Performs well.
- Transparency
- High liquidity
- Diversification
- Stable income.
Cons:
- Slow growth
- High tax payment
- Investment risk
- Management fees
- Minimal control.
Best Paying Jobs In Real Estate Investment Trusts
If you are thinking that real estate money-making only involves buying and selling properties and houses, then let me tell you that other than these, there are some other career opportunities as well in the REITs sector.
Precisely there are basically 4 types of jobs. So, let’s get some knowledge about them all.
1. Development
This job is one of the core jobs of the real estate investment areas. This is the team that is assigned for building up the entire project. This job role entirely depends on the fieldwork.
And this particular team is working with the contractors along with subcontractors for building up the whole project. This team also looks after the finances of the property developments as well.
2. Property Management
In the real estate field, property management is the most attractive form of job. The property managers are responsible for handling the property operations of the individual properties. For the growth of their business, they are also aware of the customer service advantages.
In the field of real estate, it is one of the highest-paying jobs. In case you are willing to make money in the REITs space without making an investment, it is the best job role for you. You also can start your journey as a property manager and then become an investor.
3. Asset Management
The role of asset management is totally responsible for the financial and also operational performance of the portfolio assets. Almost every investor usually appoints an asset manager, who is responsible for looking after the president’s entire asset management of the company.
4. Acquirement
For finding new opportunities for the investments, the acquirement team is responsible. As a financial analyst, you will need some knowledge along with some specific skillsets for this particular job role. The knowledge of marketing, finance, and the capital market will add more advantages to your job profile.
Conclusion
“Is real estate investment trusts a good career path?” Yes, if only your firm meets the above requirements for the same. At the same time, know in detail about all the pros and cons of real estate investment trusts described above and then make a decision to invest!
Read Also:
Leave A Reply