How Many Jobs Are Available in Real Estate Investment Trusts
Have you thought about starting a career in real estate investment trusts? If so, you could be considering the quantity of employment prospects available in Real Estate Investment Trusts (REIT). Then, how many jobs are available in real estate investment trusts (REITs)?
Well, the real estate investment trust has 326,000 open positions. Additionally, there are around 3.4 million employment in the United States that are indirectly associated. In recent years, the demand has gradually increased and is expected to continue to rise.
However, almost 3 million full-time jobs in the US employment economy were supported by REIT jobs between 2020 and 2022.
We’ll discuss some of the highest-paying real estate investing situations in this post. But first, let’s learn what REITs are, why they’re important,how to invest in them and your prospects of gaining one.
What Are Real Estate Investment Trusts
Real estate investment trusts (REITs) are trusts, corporations, or organizations that own, manage, and invest in real estate that generates income, such as office buildings, hotels, parks, and retail centers.
Investors can pool their funds to buy real estate assets that are professionally managed using this sort of security. It resembles passive real estate investing in certain ways.
A fantastic approach to produce income and create long-term wealth is by investing in REITs. The value of the REIT shares, which can be sold publicly or privately on significant exchanges, rises in tandem with the value of the underlying real estate assets.
Types of Real Estate Investment Trust Funds
While some REITs may invest in a variety of real estate assets, most concentrate on a particular property type or geographic area. Depending on their ownership structure, the sort of real estate they own or finance, or how they make money, REITs can be divided into different categories. Equity REITs and Mortgage REITs are the two most prevalent types of REITs.
- Equity REITs:
Equity real estate investment trusts (REITs) are a particular kind of REIT that hold and manage income-producing properties like office buildings, shopping malls, apartments, and warehouses. The majority of REITs fall under the category of equity REITs, which are traded on significant stock markets.
Rent payments and property sales are how they make money. Due to their high dividend payouts and potential for capital growth, equity REITs are desirable investments for income-seeking investors.
Office REITs, retail REITs, residential REITs, and industrial REITs are the subcategories under which equity REITs are categorized.
- Retail REITs;
Rent payments from tenants are how retail REITs make their money. Therefore, a retail REIT would not make any money or profit if the tenants defaulted on their rent payments for any reason. They could have to find a new tenant as a result. Therefore, before making an investment in a retail estate endeavor, it is essential to properly study the retail industry. It is lucrative to invest in a domain that has strong revenue and less debt.
- Residential REITs;
These are real estate investment trusts (REITs) that own and manage communities of multi-family rental apartments as well as manufactured homes. Before making an investment in this type of REIT, one should think about certain market ups and downs.
- Office REITs;
Companies that invest in office buildings are known as office REITs. They are paid rent from tenants who have signed long-term contracts. A prime firm in a city with little to no growth is significantly less profitable to invest in than a business in a developing city.
- Industrial REITS;
Industrial REITs are businesses that are involved in the acquisition, leasing, ownership, development, and management of industrial structures, including industrial warehouses and distribution centers. Long-term lease terms, the prevalence of net leases, and increased e-commerce demand where the tenant covers the operational costs are the key benefits of industrial REITs.
- Medical Care REITS;
Nursing homes, hospitals, and assisted living facilities are all included in health care REITs. Public policy changes can have a significant impact on the healthcare industry, making them particularly unpredictable. Examples are National Health Investors Inc. and CareTrust REIT (CTRE) (NHI).
- Resorts and Hotels REITs;
Companies that specialize in the acquisition, development, ownership, leasing, and management of hotel and resort properties are included in this subcategory. These businesses’ overgrowth sharply increases with the expansion of the economy.
- Diversified REITs;
To be considered diversified, an equity REIT must operate in at least two different property types, such as residential and commercial. The opportunity to diversify one’s holdings across several real estate asset types is the category’s obvious advantage. Examples of it include Vornado Realty Trust and W.P. Carey (WPC) (VNO).
2. Mortgage REITs:
Mortgage-backed securities (MBS), which are securities that represent a claim on the cash flows from a pool of mortgages, are the investment focus of mortgage REITs, commonly referred to as “mREITs.”
Net margin interest, which is the difference between the income they receive from mortgage loans and the cost of funding these loans, is a major contributor to the income of mortgage REITs. This paradigm may make them vulnerable to increases in interest rates.
Investors in MBS receive periodic payments equating to bond coupon payments. Income-seeking investors, who frequently pay high dividend rates, may find it to be a worthwhile investment. The risks connected with Mortgage REITS, such as interest rate and credit risk, should be understood by investors.
Agency mREITs and Non-Agency mREITs are additional subcategories of mREITs.
- Agency mREITS;
Agency REITs make investments in MBS, which are backed by GSEs including Fannie Mae, Freddie Mac, and Ginnie Mae. The agencies provide a high level of credit safety to the securities by guaranteeing the principal repayment of the home mortgages in the pools that support the securities. The MBS agency, however, could be slow, especially when borrowers prepay or refinance their mortgages.
- Non-Agency mREITS;
Non-Agency REITs engage in MBS and have real estate loans backing them that aren’t covered by government insurance. Instead, sponsorship is typically provided by private businesses without assistance from the government. These pools might include commercial mortgages or jumbo residential loans that are inappropriate for agency underwriting.
3. Hybrid REITs:
Hybrid REITs are real estate investment trusts that have both equity and mortgage components. While mortgage REITs invest in mortgage loans or mortgage-backed securities, equity REITs own real estate. By diversifying among both investment types, hybrid REITs seek to get the benefits of both with less risk than if they were engaged in one or the other.
Are REITs a good investment to venture into?
REITs can be a wise investment for a variety of reasons, and they have more than 145 million investors. Investors might think about investing in a REIT if they want to diversify their portfolio without considerably increasing risk.
You have a tax benefit because REITs do not pay corporate taxes.
While most equities have dividend yields of less than 2%, many REITs offer dividend yields of above 5%. Therefore, anyone looking for more opportunities to reinvest or generate more income should consider investing in a REIT.
How do REITs work?
In 1960, the Real Estate Investment Trust Act was passed by Congress. The idea was to give everyone the chance to make money by investing in real estate that generates an income. A REIT investment is similar to an investment in another industry.
A REIT pools funds from both institutions and private investors to purchase real estate developments, which they then either rent out or sell. Without even owning or managing the property themselves, the Unit Holders of this scheme will profit from renting and selling a portion of the property.
Apartment buildings are one of the many assets that REITs are able to own.
structures used as offices.
Facilities for self-storage.
Shopping centers including malls and lots more.
The Internal Revenue Code states that real estate sales, real estate interests, or real estate rents account for 75% of the corporation’s revenue. About 95% of the corporation’s revenue should be passive, and real estate should make up about 75% of its total assets.
How Do You Invest in Real Estate Investment Trusts?
Your money can be invested in a variety of ways, each with advantages and drawbacks. Mutual funds, exchange-traded funds, and purchasing publicly traded REIT securities are all ways to invest in REITs.
The following platforms are available for REIT investments:
- Realty mogul:
It is a platform for trading REITs online. Investors can purchase debt and equity assets as well as “private REITs” for a minimum investment of $1,000. These are akin to REITs that are exchange-traded.
Realty Mogul invests in multi-family homes, offices, retail establishments, industrial sites, healthcare facilities, and other real estate. This platform now has more than 175,000 investors registered. A few easy steps must be taken in order to participate:
- Visiting the real estate mogul website
- Open a profile online.
- Choose the investment plan based on your spending limit.
- Make the online purchase.
- Your account is ready to use online. Using your dashboard, you can always keep track of your investments.
Investors can buy shares in real estate investment trusts through this online marketplace. With as little as $10, investors can diversify their portfolios through fundraising. By using a website or mobile application to create an account, you can join this platform on your own.
Choose from the available options for the account level and investment programs.
In accordance with your investing strategy, the company will send you a personalized portfolio.
A fundraising dashboard will make it simple for you to manage your investment on your own.
Job Statistics for the Real Estate Investment Trusts Industry
REITS are in great demand, and the real estate sector has a healthy job market.
Property managers, real estate brokers, and salespeople are in higher demand, according to the US Department of Labor. Thousands of people will be employed nationwide in the real estate industry in 2022, with an average yearly salary of $51,220.
Real estate brokers are paid on average far less than in the REIT sector. The typical Real Estate Investment Trust (REIT) analyst made $108,164 year as of October 2022, which is double the income of real estate brokers and salespeople. The typical salary range, however, is between $76,495 and $145,071. According to estimates, real estate investment trusts indirectly provide 2.6 million full-time jobs.
According to projections from the Bureau of Labor Statistics, employment in the real estate sector will increase during the next few years. So a career in REITS is a great choice if you’re seeking for a steady work with high prospects and a good compensation.
Job Categories in REITS
Interested in launching a career in the REITs sector? There are several occupations in this sector, ranging from entry-level work to more senior roles. Following is a list of some of them:
Development managers supervise the construction of new structures or renovations and offer guidance on the most profitable ways to use available space. In a REIT, development positions are crucial since they ensure that the company’s properties are maintained properly and create income.
They work with financial development as part of their job as well. Because they pay well, are demanding, and are highly-regarded, development roles in the REIT industry are in high demand. Their annual salary ranges from $62,950 to $83,091. A real estate and finance bachelor’s degree is needed for this career. Good analytical abilities are required.
Acquirers are in charge of locating and assessing potential acquisition targets, formulating and negotiating contracts, and organizing due diligence operations.
These real estate investment professions also come with a high income of $80,000 per year. This role is open to anyone with a background in business, marketing, finance, or capital markets. Strong analytical abilities, real estate industry knowledge, the capacity to think creatively to solve issues, and the ability to present new investing prospects are necessary for success in an acquisition function.
Property managers are in charge of inspecting the REIT’s properties and overseeing lease compliance, maintenance and repair, rent collecting, and marketing. There are no prerequisites for employment as a property manager.
The best candidates have strong project management skills and can handle a range of situations. The salary of a property manager is determined by the REIT firm and ranges from $47,657 to $65,989. Average growth in property manager jobs is estimated at 7% by 2023 with 77,000 jobs available in US.
In the real estate investment trusts sector, it is one of the top paying jobs. A REIT’s asset manager oversees daily operations and tries to preserve and increase the portfolio’s value. It can entail managing upgrades and repairs or negotiating leases.
It entails creating and carrying out company plans, keeping track of performance, and managing capital expenditures. To complete their jobs, asset managers must be able to collaborate with development, accounting, finance, and acquisitions.
Additionally, they are in charge of managing every part of a REIT’s portfolio, including its acquisition, financing, capital expenditures, leasing, and disposal. Up to $200,000 can be earned annually by asset managers.
Investor Relationships Officer:
Relationship management with investors is the responsibility of IR. They often entail developing and implementing communication plans for investors, analysts, and the financial community with a team of specialists. The investor relations department will plan the annual meeting and any related materials, such as the proxy statement and annual report. Additionally, they are required to comply with all SEC regulations.
The candidate must possess a bachelor’s degree in finance and accounting to be considered for this post. He must be proficient in English and be able to provide outstanding presentations. The abilities that a competitive person should possess include managing investor relations (IR) programs and doing financial tool analysis. The typical annual wage is $104,509.
Residential Property Sales Manager:
Real estate sales supervisors oversee a team, train and assist agents, aid in the expansion of their firms, and offer performance evaluations. They are in charge of the day-to-day operations of the business unit, which include staff management, sales, equipment rental, repair, and maintenance, daily locker rental, and visitor service trails.
To be considered for this leadership position, one must be interested in leading a team, acquiring new clients, gathering and organizing sales data, and handling challenging duties. However, a bachelor’s degree in business, marketing, finance, or accounting is required. A real estate sales supervisor makes $44,321 per year.
Creating new leads, visiting clients, and creating lease agreements are all tasks that fall within the purview of the leasing consultant. The lease expert speaks for the real estate sector. By helping clients choose homes and properties that suit their needs and budget, they aid clients in making purchases.
Candidates for this position should have exceptional promotion and advertising skills in addition to real estate sector understanding. Depending on the company and work level, the average annual salary for a leasing consultant is $35,500. For this position, a candidate should have a bachelor’s degree in property management or a closely connected discipline.
Real Estate and Property Appraiser:
A real estate appraiser is a specialist tasked with determining a piece’s worth. In-depth market knowledge is necessary for appraisers to produce an accurate estimate.
The applicant for this position must be certified in appraiser training and possess additional real estate expertise. Earning potential for real estate property appraisers ranges from $35,000 to $200,000. Additionally, they need to be adept at communicating with clients, have strong data analysis and comparison skills, and have excellent listening skills.
Real Estate Investor:
By making real estate investments, real estate investors help people become financially independent. Fix-and-flip, buy-and-hold, wholesale, and rehabbing are common techniques used by investors to increase the return on their investment.
An investor in real estate can make up to $124,000 a year. to invest in real estate It’s necessary to have a bachelor’s degree in accounting, business, or finance. Additionally, the individual should be proficient in management and communication techniques. For people with an interest in purchasing and selling real estate, it is a well-paying job.
Researching REITs and making recommendations to investors would be the main duties of a REIT analyst. You need to be well-versed in the REIT sector and the variables influencing REIT performance to be successful in this position. Additionally, you should be able to successfully convey your results to management teams of REITs as well as investors.
A bachelor’s degree in economics, real estate, or finance is required for a REIT analyst. It is essential to have analytical, research, and organizing skills. The compensation is around $90,885, although it varies based on your state, level of experience, talents, and many other criteria.
Jobs for REIT analysts are becoming harder to obtain and more in demand as the labor market tightens. Despite this rivalry, jobs for REIT analysts continue to rank among the highest in the sector.
Real Estate Lawyer:
Legal representation is given by real estate attorneys to people and businesses engaged in transactions involving the buying, selling, developing, or using of real property. Real estate attorneys prepare and analyze legal paperwork, carry out due diligence, represent clients in court, and give legal compliance advice.
A bachelor’s degree in law or a field connected to real estate is required for the position. It’s simple to make between $119,000 and $125,000 a year.
What Percentage of Industrial REITs Exist?
Although there are many different kinds of REITs, industrial REITs are rather uncommon. There are reportedly just 13 industrial REITs in existence. Rexford Industrial Realty, Prologis, and Duke Realty Corporation are the three largest industrial REITs, with market capitalizations of $10.3 billion, $88.8 billion, and $19.5 billion, respectively.
What is the REIT’s average return?
Depending on the specific trust and the general status of the economy, the average return on a REIT, or real estate Investment Trust, can change. The FTSE NAREIT Equity REIT Index is frequently used by investors to gauge the health of the US real estate sector.
The 10-year index’s average annual return in June 2022 was 8.34%. The index has a 25-year return of 9.05% compared to the S&P 500’s 7.97% and the Russell 2000’s 7.41%. However, compared to other investments like bonds or stocks, REITs often provide investors larger returns. It’s because REITs must legally pay the majority of their profits to shareholders, which guarantees a steady flow of revenue.
Advantages of REITs
The numerous advantages that REITs provide make them a desirable investment choice. The following are some of the most salient advantages of purchasing REITs:
Because they are required to distribute at least 90% of their taxable revenue as dividends to shareholders, REITs have the potential to provide substantial returns. It implies that they frequently have the ability to reinvest their profits and expand more quickly than other kinds of investments.
You can diversify your portfolio by adding a REIT as a new asset class. Through diversification, you can increase your exposure to several types of real estate, such as office buildings, malls, apartments, warehouses, and more. It can lessen risk and increase earnings.
REITs must abide by SEC rules and are extremely transparent. As a result, it offers an additional layer of protection to guarantee that the management does not misuse the investor’s money.
Disadvantages of REITs
For individuals seeking income and diversification, REITs can be a decent investment, but it’s crucial to comprehend the drawbacks before making a decision. Here are a few of its minor flaws:
- Market hazard
- Dividends are taxed at the same rates as other income.
- Potential for high management and transaction costs
- little growth
Future industries that are emerging include REITs. There are more work opportunities as a result of its growth. Some vocations call for a bachelor’s degree, while others call for specialized training.
Depending on their academic background and work capacity, a person may make more than six figures. There are a lot of different careers out there, so you may be sure to find one that fits your interests and skills well. Therefore, don’t wait to launch your career in the REITs sector right now.