Thinking of entering the Real Estate Investment Trusts (REITs) to make a sound career in it? Would you please read our guide on the best career chances in REIT that will give you a prosperous future?
As an investor in real estate, you must consider investing in Real Estate Investment Trusts (REITs) if you build any fixed-income or equity portfolio. Investments in REITs offer greater diversification, possibly higher total returns (90% of the taxable income is what REITs are required to pay out to the shareholders), and/or declining overall risk.
To put it in simple words, REITs can generate dividend income plus capital appreciation that makes them an excellent balancer to bonds, stocks, and cash.
This is because REITs are the owners or managers of income-generating commercial real estate properties.
They become owners by directly investing in properties from where they earn rental income and management fees. And, as managers, REITs invest in real estate debts, which are mortgages-backed securities and mortgages.
REITs mainly focus on a specific type of property, for example, shopping or retail centers, healthcare & hospitals, or hotels & resorts.
If you are looking for investment opportunities in real estate, you can invest individually in the companies with a mutual fund or via an exchange-traded fund.
In addition, several REITs are offering blossoming career opportunities if you are speculating about entering this field.
If you want to know how many jobs are there in real estate investment trusts, read below about the main categories of REITs and get an idea regarding the one that suits you the best.
Top Career Opportunities For You In Real Estate Investment Trusts
1.) Retail REITs:
Of the total REIT investments, nearly 24% are freestanding retail and shopping malls. As an investor in retail real estate, REITs first examine the entire industry to know whether the industry is financially strong or not and its prospects for the future.
Retail REITs make money from the rent they receive from the tenants. However, it may also happen that a tenant goes into bankruptcy due to non-payment of rent for an extended period.
At this point, REITs need to search for a new tenant, which is never an easy task. Hence, retail REITs must look for the most substantial anchor tenants possible, for instance, home improvement or grocery stores.
2.) Residential REITs:
Residential REITs function as owners and operators of manufactured housing and multi-family apartment buildings on rent. This type of REIT looks for the best apartment market where affording a home is low concerning the rest of the country.
For example, in cities like Los Angeles and New York, the cost of single homes is high, forcing people to rent, which subsequently shoots up the prices that landlords can charge every month. Therefore, the largest residential REITs pay attention to the large urban centers.
A residential REIT works well based on the strategy of low apartment supply in a particular market versus high demand for apartments.
3.) Healthcare REITs:
Under Healthcare REITs come real estate of medical centers, nursing homes, hospitals, and retirement homes. The success of this REIT type is directly connected to the healthcare system of the country.
Maximum REITs who operate these facilities earn money through Medicaid and Medicare reimbursements, occupancy fees, and private pay. Therefore, if the funding of healthcare is low, the functioning of REIT shall also remain low.
Rising demand for healthcare services will be profitable for healthcare real estate.
4.) Office REITs:
Office REIT type looks for investment in office buildings. Office REITs earn rental income from tenants who have occupied the office building on a long-term lease.
5.) Mortgage REITs:
10% of the total REIT investments are in mortgages against the real estate itself.
The most popular mortgage REITs are Freddie Mac and Fannie Mae, government-sponsored enterprises that purchase mortgages on the secondary market.
Job Roles Of REIT
So, here are some of the job roles in real estate investment trusts are listed below.
If you are into acquisitions in REIT, the scope of your work includes identifying new investment opportunities and cracking a final deal.
Acquisitions are more of a finance role, so if you have a background in finance, capital markets, general business, or marketing, you can easily find a job in a REIT.
Starting from an analyst’s position, you can expect a progression to associate, manager, and then vice president of acquisitions who earns more than $200,000 a year.
2.) Property Management:
As a property manager in a REIT, your job role would constitute overseeing operations of an individual property, i.e., from leasing to collections to maintenance and everything in between. As a property manager, you can expect an annual income of $60,000 to $80,000
Under the development department of REIT, you will be responsible for building new projects from scratch.
This job role is a project management function that collaborates with other departments to finance the property that is being constructed while working closely with contractors and subcontractors to manage the building and design of the project.
4.) Investor Relations:
As an investor relations manager, you will manage all outbound communications with REIT stakeholders.
Your team will plan the annual meeting and meetings documents, viz the proxy statement, annual report, etc., in line with the regulations stipulated by the SEC.
If you’re hired as a middle-management investor relation manager, you can expect an annual salary of $150,000.
5.) Asset Management:
The asset managers in REIT look after assets’ portfolios’ financial and operational performance.
The Asset Management team generally has a senior vice president or vice president who oversees asset managers responsible for managing their handful of assets.
The Final Thoughts
To get into the real estate industry, one does not require to go to any specific real estate school. However, is real estate investment trusts a good career path or not is possible to answer if you hold an educational background in accounting or finance because maximum jobs in REITs look for candidates from F&A backgrounds since REITs have stricter regulatory and reporting requirements.
Jais Frank is a freelance content writer and enthusiastic blogger. He is the co-founder of RSLonline. He contributes to many authority blogs such as Finance Team and SB Newsroom. He also likes to write in many international magazines and journals.