The High-Paying Career You Never Knew Existed: A Career In REITs
Real Estate Investment Trusts, or REITs, are one of the favorite investment options for people looking to invest their money and make regular income. But does working with REITs make a good job option?
If you are planning to start your career in this field, it would be great to know about the industry, job opportunities available, and possible advantages and difficulties.
This article will provide you with all the information to help you decide if working with REITs is the right job for you.
What Are Real Estate Investment Trusts (REITs)?
A Real Estate Investment Trust, or REIT, is a company that owns, manages everything, or finances income-generating properties. Income-generating properties may be office buildings, shopping centers, hospitals, and hotels.
REITs enable individual investors to pool their funds to invest in large real estate projects without buying properties themselves.
One key characteristic of a REIT is that it must distribute to shareholders at least 90% of its taxable income in dividends. This is an advantage to investors seeking a predictable flow of income from their investment.
You can think about a REIT as being kind of like a mutual fund except instead of stocks and bonds, this invests money in real estate.
How Do REITs Work?
REIT collects money from the investors by utilizing it to buy and develop real estate properties while running them.
The shareholder purchases shares of the REIT, and they provide dividends based on the income created by the REIT of the properties. This source of income may be due to the tenants paying to stay in them or its profit when it sells such real estate.
REITs have two primary methods of generating revenue:
- Rental income: This is money that tenants pay to use the spaces in the properties owned by the REIT.
- Capital gains: In case a REIT sells a property and incurs a profit, the profit is shared with the shareholders.
The purchase and sale of REITs occur on the stock exchanges, making it relatively easy to trade as shares.
Types of REITs in the Industry
If you are wondering, “is real estate investment trusts a good career path?” then you must understand the types of REITs existing in the industry.
There are several types of REITs, each focused and having a different plan for investment. Some of these include:
Equity REITs
This is the more common equity. REIT owns and manages real property for generating earnings from rents and leases. It has a tendency to invest in commercial property, like an office building, mall, or apartment complex.
Mortgage REITs
A mREIT, or Mortgage REIT, does not own physical properties. They invest in mortgages or mortgage-backed securities. This means that they collect interest from those loans, making their investment more debt- based.
Hybrid REITs
Hybrid REITs, like equity REITs, retain characteristics of both mortgage and equity REITs. They buy real property but, meanwhile, hold mortgage-backed securities.
Private And Public REITs
Private REITs are not publicly traded on any stock exchange. They are generally available only to larger investors or accredited investors. Public REITs are listed in the stock exchanges and are hence accessible to public investors. Stocks can be easily bought and sold
Commercial Real Estate Categories
REITs usually specialize in different types of commercial real estate. These types determine the type of property that a REIT will invest in.
There are many types, including the following:
Retail Real Estate
Retail REITs invest in shopping centers, malls, and individual stores. Their source of income is the rent collected from the tenants, like clothing stores, restaurants, and supermarkets.
Office Real Estate
Office REITs own and operate office buildings. They earn revenues by leasing office space to companies.
Flats And Houses
It invests in apartment buildings and rental houses. It earns money by collecting rent from the people staying there.
Property For Health Investments
Healthcare REITs build hospitals, nursing homes, and medical offices. There is a very nice emphasis on health care, and given the nature of the ease, it’s very reliable on account of long-term lease incomes.
Factories And Warehouses
It operates warehouses, distribution centers, and factories. Industrial REITs have been getting hot lately as more and more people are buying stuff online.
The Different Jobs on a REIT Team
A job in REITs can be quite diversified in nature. Many careers exist, from asset management to finance.
Here are some of the major job types:
Real Estate Analysts
They research market trends, appraise the value of real estate, and advise REIT managers on which investments to make.
Asset Managers
The asset managers supervise the real estate inventory of the REIT. They want to add value and profit to the real estate inventory.
Property Managers
Property managers handle all the daily affairs of the properties owned by the REIT. It deals with repair, agreements on rental, relations with tenants, and many more.
Financial Analysts And Accountants
These professionals handle the financial aspect of the REIT and are responsible for proper accounting, budgeting, and the preparation of financial reports. They also analyze the REIT’s financial performance and make recommendations for improvements.
Legal And Compliance Officers
The REIT attorneys ensure that the company is following rules and legal aspects regarding real estate and gives proper care to contract negotiation, leasing contracts, and problems in litigation.
Investor Relations
This job is all about managing connections with shareholders, investors, and analysts. Investor relations teams ensure there is clear communication about how the REIT is doing.
Advantages And Disadvantages Of Working For A REIT
This calls for consideration of the positive and negative sides before venturing into a job with a REIT.
Advantages
- Diverse career opportunities: Whether one is interested in finance, operations, or legal work, there’s probably a job in the REIT industry for everyone.
- Stable income potential: Most REITs offer good salaries and the possibility of bonuses, especially in investment-related jobs.
- Growth potential: The real estate market keeps growing, and REITs provide career advancement opportunities in other areas.
- Experiencing the Real Estate Industry: Working for a REIT will give you experience in addition to knowledge about the real estate market, helpful to your career.
Disadvantages
- Market risks: The real estate market is very volatile and may change overnight. An economic downturn would lower property values, thus reducing income for REITs and their employees.
- Long hours: Some jobs in the REIT industry are more demanding, particularly asset management and finance jobs. Such jobs require long working hours, especially during quarterly report preparations or big property deals.
- High competition: In the real estate industry, there are many competitors. It is very hard to be chosen in a dominant REIT.
Career Opportunities in the REIT Industry
The REIT industry provides many options of jobs for either finance, operations, or legal work, and in managing properties.
Among the most common job opportunities are the following:
- Real estate Investment Analyst.
- Asset Manager
- Property Manager
- Financial Analyst.
- Investor relations Manager
Legal and compliance officer Jobs can be found in the REIT sector in plenty so you can choose a suitable one according to your talents and interests.
Skills and Qualifications for a Career in REITs
A career in REITs requires knowledge of real estate and strong financial acumen as well as strong analytical capabilities.
Some of the major qualifications and skills include:
Real Estate Knowledge: knowledge of the real estate market and know-how to value properties to invest.
Money Skills: Talent in financial modeling, accounting, and analytical skills.
Communication skills: Good verbal and written communication skills, especially when one is in investor relations or asset management.
Analytical thinking: Critical thinking-the ability to envision complex data and make rational investment decisions relating to property investment.
Education: In general, a bachelor’s degree in finance, real estate, economics, or business would do. However, an accredited professional certification such as the CFA can also help.
Is REITs a Good Career Path for You?
Anyone interested in real estate, finance, and investment management would love a career associated with REITs. Such opportunities include a host of varied roles, growth scope, and exposure to the market of real estate.
How Do REITs Make Money?
REITs make their money mainly through rent and earnings from selling properties. They make money by renting business or home properties to individuals when they own business or home properties. Also, if the REIT sells a property for more than it paid, then it makes money and shares it with the investors.
Benefits of REIT for Doctors | Is Real Estate Investment Trusts a Good Career Path for Doctors?
Doctors, especially private practitioners, are always looking for ways to supplement their incomes and thus provide for old age. Investing in REITs enables doctors to make money without having to take time to run a physical real estate business.
Reasons Why Doctors in the USA Should Invest in REIT
Diversification: REITs offer the opportunity for doctors to diversify their investments, thereby reducing the risk.
Passive Income: The money invested in REITs would allow doctors to receive constant income from rental and the profit of sales without them worrying about the properties.
Low Time Commitment: REITs are the least time-consuming way to invest in real estate. This makes it perfectly suited for busy medical professionals.
Why is REIT a Good Career Path for Doctors in the Long Run?
Doctors, if they wish to work in healthcare REITs, learn special skills and have multiple job options. Doctors using their medical knowledge with an interest in real estate working in healthcare REITs create very interesting career choices.
Wrapping It Up!
In summary, working in REITs would be rewarding because you can have a stable income with the possibility of career promotion.
The key issues include the dynamic market and competition, but, after all, the benefits of the field, as it is a relatively developing one with lots of job types, outweigh the issues. If you are interested in real estate and finance, then you might want to consider a job in REITs.
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