Real Estate Investment Trusts own and manage real estate investment properties across various locations or industries. Investing in the real estate market on your own can be complicated.
Fortunately, a Real Estate Investment Trust (REIT) can allow an individual to invest in real estate properties, just like you would a particular stock. REITs offer individuals easy access to real estate investing and can help ensure individuals reap the rewards of real estate without getting involved in the physical management of properties.
REITs offer investors fantastic opportunities. However, a variety of other economic prospects may come from a REIT. For example, working for a REIT may present someone with an excellent career path in addition to understanding the real estate industry.
If your goal is to invest in real estate, a career in real estate investment trusts can be a paid learning opportunity. Of course, you could read the best books on real estate and start a real estate investment group, but working in the industry and learning with a hands-on approach is the best.
Depending on your education and what you want to do, REITs can offer many exciting jobs and may represent a highly lucrative career opportunity.
What Is a Real Estate Investment Trust (REIT)?
Real estate investment trusts or REITs own, operate, or finance income-producing real estate across many property sectors. The real estate investment trust is a way to invest in real estate passively.
REITs allow anyone to invest in real estate assets by purchasing individual company stock or through mutual funds or exchange-traded funds (ETF). Public REITs are also listed on major stock exchanges, and investing in REITs is as easy as investing in the S&P 500.
Types of REITs
Equity REITs are the most prevalent type of REIT. Equity REITs own or operate income-producing real estate like shopping malls, commercial real estate, self-storage, health care facilities, apartment buildings, warehouses, office buildings, cellphone towers, and hotels.
Mortgage REITs (mREITs) only provide financing for income-producing real estate by borrowing money at low short-term interest rates and purchasing mortgages that pay more excellent long-term interest rates. The difference between the two rates is the Mortgage REITs’ profit. Mortgage REITs don’t own or operate real estate property.
Unlike traditional equity REITs, mREITs fluctuate wildly based on interest rates. Also, mortgage REITs are highly leveraged. The risk with mREITs is sudden changes in the mortgage-backed securities (MBS) market, leading to massive losses or bankruptcy.
A hybrid REIT is a real estate investment trust company that effectively combines equity and mortgage REITs (mREITs). They own and manage properties, collect rents, and invest in mortgage securities.
Hybrid REITs try to profit from rising and falling interest-rate environments by investing in actual properties and mortgages.
Public Non-Listed REITs
Public non-listed REITs are registered with the SEC and are therefore regulated, but they are not traded on public exchanges. They operate like listed REITs nearly every other way.
Still, since they do not sell publicly, investors need to purchase shares directly from the REIT’s management company through its real estate syndication platform or a third-party broker-dealer.
Also, public non-listed REITs are still required to make regular, periodic regulatory filings. Public non-listed REITs, however, are open to non-accredited investors.
The Fundrise eREIT is the most common example of a public non-traded REIT with a low minimum of only $10.
Private REITs are exempt from SEC registration and whose shares do not trade on national stock exchanges. Private REITs have little liquidity; hence, it can be challenging if you need to sell immediately. They are typically only available to individuals meeting the accredited investor qualifications.
Top Companies To Invest In Real Estate Investment Trusts
My favorite real estate companies are:
|Investment Platform||Open to||Type of Investment||Minimum|
|Fundrise||Accredited and non-Accredited Investors||Residential||$10|
|Streitwise||Accredited and non-Accredited Investors. And also foreign/non-USA investors||Commercial||$5,000|
What Job Opportunities Exist in Working for a REIT?
Numerous job opportunities exist for people interested in working for a REIT that can make working for a REIT a good career path. Jobs that come from working with real estate investment funds include:
Real Estate Agent
A real estate agent is one of the chief drivers of property purchases and sales for a REIT. This individual will work with the rest of the team to find properties, manage inspections, and finalize all purchases and sales.
They should be experts in the type of market in which a REIT operates and be capable of guiding the real estate investments for the entire REIT.
A real estate broker is a critical component of any real estate effort. Brokers usually start in the real estate field before getting an advanced license. A real estate broker can continue to operate in the real estate field or hire other real estate agents to work for them.
Brokers usually work for real estate investment trusts and help these trusts manage their portfolios and buy and sell properties.
A real estate investment trust appraiser’s job is determining the property’s value. An appraiser should know how to value both residential or commercial properties.
They work with a property owner to determine a property’s fair price or price range. They may also work with management to determine where the value add real estate investment opportunities may exist.
The success or failure of an appraiser can ultimately determine if a REIT is successful in the stock market, as their work will help determine the amount of money spent by a real estate investment trust. The appraisal has a massive impact on asset class performance.
An appraiser is ultimately critical to the property valuation of a real estate investment trust – their judgment will determine the necessary mortgage loans or raising capital for real estate.
As an acquisition analyst, it is your responsibility to coordinate and oversee the implementation of plans while searching for attractive real estate investments. You must be proficient in market trends to pinpoint the various asset class performance. Additionally, you are given the job of negotiating prices along with preparing legal documentation and delivering a comprehensive guide from start to finish for each client who wishes to acquire property.
A REIT’s acquisitions analyst is responsible for uncovering lucrative investment options. An extensive understanding of the real estate market and its current trends is essential to succeed in this role. Additionally, analyzing existing projects to identify potential growth opportunities and sourcing additional investments are critical components of this position.
Furthermore, you must know market trends, available properties, and possible development plans. This career can start as an intern and typically leads to the mid-level management level in the real estate sector.
Real estate investors usually don’t personally manage their property even if they are aware of landlording basics, and this is undoubtedly the case for a REIT. Property managers typically work for a REIT as part of the operation to keep the physical aspect of a building (or buildings) functioning.
Property managers will work with tenants, collect payments, provide customer service, and ensure necessary repairs or security measures are taken to keep a building in tip-top shape. As such, a property manager is a person that a tenant is most likely to interact with.
Working as a property manager in a REIT is a good career path because you will learn property management which helps screen property managers for your properties.
A real estate investment trust analyst has wide-ranging and essential responsibilities. This person is ultimately responsible for analyzing properties. This means working with other staff to determine their price, profitability, and projections in terms of rent and occupancy. A REIT analyst must know how to evaluate rental properties and deeply understand the real estate market. Since cap rates are essential for commercial real estate, the analyst must understand the economic climate and how interest rates or an upcoming recession could impact valuations.
Asset management requires a sharp eye to recognize which properties should be acquired and the amount of debt necessary for viable investments. In addition, asset managers are responsible for ensuring that all property operations run smoothly, with expenses per projected revenues.
This mid-level management position is your chance to make impactful decisions. As an asset manager, you will be tasked with identifying the most beneficial properties for your clients to purchase and offering financing deals if necessary. This role comes with significant responsibility—you must monitor property operations and costs against revenue projections to determine a successful outcome for all involved. Moreover, this is also an opportunity for you to develop relationships by providing guidance toward better investment opportunities and taking decisive action when required.
To be successful in this role, you must have a comprehensive understanding of the real estate industry and demonstrate expertise in managing clients’ rental properties and portfolios. Furthermore, you will need to guide investment strategies that maximize returns while minimizing risk. You should also know how to capitalize on appreciating assets for your clients, allowing them to realize greater profits from their investments.
Your reports will be the basis for your purchasing decisions, showcasing how much is needed and the potential return on investment by balancing risk vs. reward.
This job’s trajectory begins in mid-level management, but reaching the highest echelon necessitates a deep understanding of real estate operations and insight into market fluctuations.
As you can imagine, a real estate investor and REIT need a legal expert on their team. This individual must know real estate laws inside and out. They should know how to write contracts, read contracts, and work to dispose of the property.
They should also help you evaluate any property’s legal and real estate investment risks.
A tax professional will help the real estate investment trusts reduce the income lost to taxes. It is among the best-paying jobs in the real estate market, reflected by its education-heavy position and intimate knowledge of the tax code regarding real estate investment trusts. Applying the tax laws such as QBI for rental properties, depreciation, cost segregation, opportunity zones, 1031 exchanges, etc., to avoid higher tax payments for clients is one of the best-paying jobs.
A developer is one of the most lucrative and stressful positions a person can have within the real estate world, requiring a combination of high-income skills. A developer is ultimately responsible for developing a property from start to finish. They work to obtain financing, hire staff, create plans, and eventually construct buildings.
Developers are massive coordinators of real estate projects. They often work with a REIT to create new construction of office buildings, student housing, residential properties, and much more.
Serving as a real estate developer allows an individual to control a project from start to finish. However, it takes a massive degree of experience, financial connections, and know-how within the real estate world to create a real estate project.
This job also includes taking on turnkey real estate projects, where you will create and deliver clients with real estate properties that are entirely functional.
Based on the salary, if you are wondering, “is real estate investment trusts a good career path?” consider an executive position. As a development executive, you earn a 7 figure salary and tremendously impact your company.
How Much Do Real Estate Investment Trusts Pay?
It’s tough to give an exact answer to this question. As noted above, there are many job opportunities for individuals interested in working for a REIT. These run the gamut and vary on various factors, including education, experience, and the location of the marketplace.
According to available information, the median salary of specific real estate investment trust fields is as follows:
- Real estate analyst: $81,410
- Real estate agent: $48,770
- Asset Managers: $51,000
- Acquisition analyst: $52,000 to $69,000 per year
- Real estate property appraiser: $61,340
- Real estate attorney: $127,990
- Real estate broker: $48,770
- Property manager: $59,230
- Developer: $103,616
These are just estimates that pertain to the real estate investment trust industry, and these estimates can vary wildly depending on HCOL vs. LCOL areas.
Furthermore, pay is one of many considerations when deciding if you want to work for a real estate investment trust. Other considerations include the following:
There is no question that some real estate market sectors are growing while others are more challenged. For example, a widely noted housing shortage is driving up the price of housing and increasing demand for more housing stock.
At the same time, the commercial real estate market has taken a significant hit due to the remote work trend, with more and more people working from home. This has changed growth projections within the real estate market and may alter if you work for a REIT or what type of REIT you work for.
The financial performance of commercial buildings is less profitable. Indeed, when deciding to work for a real estate investment trust, you must keep the asset class’s performance in mind.
Working for a real estate investment trust may create massive time constraints on your life – much more so than working for other asset classes. Working as an appraiser will make little demands on your time, but being a property manager for a real estate investment trust will likely increase demands on your time. After all, a building leak will not happen only during regular work hours.
Your work schedule could be flexible depending on the type of jobs you pursue in real estate investment trusts.
Real estate investment trusts have specific positive tax advantages that make them highly beneficial. However, these tax considerations and implications are typically tied directly to the amount they pay their institutional investors, not their staff.
Working for a real estate investment trust may give you some investing advantages. Still, you will need to talk with a financial professional before determining exactly how working for a real estate investment trust may be more advantageous than working for other jobs.
Pros of a Job With Real Estate Investment Trusts
Real estate investment trusts come with many positives. This includes:
- The opportunity to work on a commission basis means you can make an excellent income if things are going well.
- The chance to participate in a fascinating and fast-paced field.
- The opportunity to be highly creative within the financial space, working with people to help them develop customized solutions about where they will work or live.
- The chance to learn skills that could increase your real estate passive income when investing on your own.
Cons of a Job With Real Estate Investment Trusts
However, there are challenges within this industry as well:
- The real estate industry is highly dependent on economic conditions. If things go wrong, they go bad quickly, and you can find yourself out of a job if the economy crashes. And once you are unemployed, it will be harder to find a job in a recession.
- The success or failure of your career may ultimately have nothing to do with your job performance. Global challenges, real estate market fluctuations, or issues within the local region or industry in which you operate may depress the real estate market. This may mean that your real estate investment trust suffers from significant issues that have little to do with you or your company.
- Other recession-proof jobs may present a more lucrative, stable, or less-stressful environment.
- Some positions, such as property manager, could have a more rigid work schedule. If you are looking for a flexible work schedule, other jobs in real estate investment trusts might be better suited.
How Many Jobs Are Available in Real Estate Investment Trusts?
U.S. REITs contributed the equivalent of 2.9 million full-time jobs, based on data published by NAREIT. The jobs included brokers, investor relations, accountants, architects, designers, financial analysts, property managers, marketers, developers, human resources, and more.
The estimated GDP contribution to the labor income was $197 billion.
The currently available jobs in real estate investment trusts based on job listings on Indeed.com are around 2060. LinkedIn indicates a lower number of jobs in real estate investment trusts, but it could be due to the cost of advertising on LinkedIn.
Also, LinkedIn postings tend to skew towards moonshot companies and not real estate, which are more akin to value investing companies. And most real estate jobs are widely circulated in real estate investment groups.
Creating Your Own REIT
Are you interested in starting your own real estate investment trust (REIT) instead of working for one? If this appeals to you, you must know IRS rules and regulations.
Here are the requirements of Real Estate Investment Trusts
- A board of trustees or directors has to manage it.
- At least 90% of the total taxable income needs to be returned as shareholder dividends. The requirement of returning income to shareholders is one of the reasons REITs feature prominently in several dividend aristocrat portfolios.
- A minimum of 75% of income must come from real estate investment.
- A minimum of 75% of its assets must be invested in cash, U.S. treasuries, and real estate.
- Any real estate investment trust or REIT must have at least 100 shareholders or investors after the first year.
- Five or fewer individuals cannot hold more than 50% of the total shares.
Is Working at a REIT a Good Job?
Working at real estate investment trusts could be a good career path if you want to learn more about real estate and have the necessary skills to succeed.
Yes, the industry is cyclical, and downturns are to be expected. But in the event of a layoff, individuals who want to work for a real estate investment trust may find other potential asset classes for which they can work. This includes working for a mutual fund, buying and selling different stocks, or exploring other income-generating assets.
In most cases, the jobs for a real estate investment trust noted above are transferrable to another financial field. Most real estate jobs have a huge need for skilled analysts, appraisers, coordinators, managers and more.
These positions can unquestionably help someone earn a stable income without worrying about selling rental properties or office buildings. They can generate a steady, regular income.
Furthermore, an individual interested in real estate does not need to work for a real estate investment trust to have a robust financial career. You can find a good career path in any related field, including the real estate market, wholesaling houses, buying and flipping homes, buying and selling turnkey properties or even real estate crowdfunding. A real estate investment trust is one of many career paths in front of you.
So, what’s the best career path? It is a complex and highly individualized question; the ultimate answers are up to you.
A real estate investment trust can harness income-generating real estate. This trust can generate management fees and taxable earnings for you, and you can help others with an investment for monthly income. However, there are real challenges when the market crashes or faces slow growth.
The real estate industry is not for everyone, and real estate owners often report high-stress levels and financial turmoil. You have to be willing to face these issues if you want to be involved with a real estate investment fund.
You also have to conduct a comparative analysis. How do other investments perform compared to a real estate investment trust? How does that decision impact your ultimate career path? Are there other things you’d like to do with your investment portfolio or help others do to increase their gross income?
If you are interested in working for a real estate investment trust, you must answer these questions. As you can see, this is a complicated decision, but hopefully, you are now in a better place to make it.
John Dealbreuin came from a third world country to the US with only $1,000 not knowing anyone; guided by an immigrant dream. In 12 years, he achieved his retirement number.
He started Financial Freedom Countdown to help everyone think differently about their financial challenges and live their best lives. John resides in the San Francisco Bay Area enjoying nature trails and weight training.
Here are his recommended tools
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Personal Capital: This is a free tool John uses to track his net worth on a regular basis and as a retirement planner. It also alerts him wrt hidden fees and has a budget tracker included.
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Fundrise: One of the top real estate crowdfunding platforms for non-accredited investors. Sign up for free and look at passive real estate investment opportunities with low minimum (only $10).
Streitwise is available for accredited and non-accredited investors. They have one of the lowest fees and high “skin in the game,” with over $5M of capital invested by founders in the deals. It is also open to foreign/non-USA investor. Minimum investment is $5,000.
PeerStreet has a low $1,000 minimum, which allows for better diversification for real estate accredited investors. You can define the criteria based on rate, LTV, duration, etc., and use their automated investing feature to place you into investments that match your criteria. Or manually select the investments.