Starting a career in any industry isn’t easy at first. But after the decision has been made to pursue that career path, it gradually becomes less daunting as you learn the ropes and adapt to your job duties. The same can be said about REITs.
REITs is one of the fastest-growing part of the capital markets. REIT is an abbreviation for Real Estate Investment Trust and in the following paragraph, we shall dive into: what REITs really are, what job careers can one pursue in relation to REITs, and whether or not these are good career paths for anyone considering.
See the table of content for an overview of this article.
What are Real Estate Investment Trusts?
In short, real estate investment trusts (REITs) are publicly traded companies that buy, sell, and operate cash flow-producing commercial real estate. These companies create trusts similar to mutual funds that finance the purchase of real estate assets, including hospitals, schools, warehouses, and hotels, from a pool of investors’ money.
With REITs, retail investors like you and I can own tiny shares of a diverse real estate market portfolio through a real estate investment trust. You can enjoy a reasonable return on investment (ROI) as rent is been paid or after the mortgage is been paid for a given real estate property. Cool right?
What is REPE?
Those familiar with finance and investments know that investment banking, private equity, and real estate private equity are closely linked with just minor differences. Real Estate Private Equity companies take money from private investors whether from pension funds, insurance, funds of funds, or investment cash from high net worth individuals (HNWIs).
A good majority of REITs use the REPE capital structure to finance and manage their real estate holdings. Unlike private equity or investment banking where funding takes stages, REPEs are a lot bit more flexible.
The same can be said about the professionals who work in REPE enterprises. People with experience in REIT acquisitions, real estate development, sales and marketing experience in the commercial real estate niche, and investment banking work experience. The Blackstone Group is so far the largest REPE company in the world.
REIT Jobs: The Full Description
Now that you know that REIT and REPE are truly real estate on steroids. How do you make a career out of it? What job opportunities are there in real estate investment trusts? The answer depends on the type of business, strategy, and region. Because, like any company, REITs need a team to scout for good real estate developments with a high value-to-price ratio.
They also need team members to close deals with respective property owners and developers. Some would evaluate the financial worth of the commercial real estate property, enlist it, and market it. Team members who would add value to the bought or sold property by renovations and prepare the legal documentation are all needed.
So, with this wide range of job roles, you can see that salespersons, accountants, asset managers, portfolio managers, public relations officers, RE acquisition professionals, lawyers, and quantity surveyors are the major job titles needed in REIT firms.
The career options with REITs are plenty and REITs are used as active recruiters in most instances. Since most REITs work on real estate private equity REPE projects, it is only normal that the emphasis of the team is on profitability.
This oftentimes makes neglecting some important perks for the clients who would use these complexes a norm. Since this is quite rampant with REPEs, efforts are been made so that property managers, white-collar and brown-collar employees work to fill in the suitable needs of residential buildings, schools, storehouses, and offices.
Is Real Estate Investment Trusts a Good Career Path?
Some curiously ask, “Is real estate investment trusts a good career path? The modest answer is “yes.” Real estate investment is a good career path because it offers many available jobs.
Real estate investment trust is a good career path because you can choose the area you’re interested in; it’s up to you to figure out your preferred job position that will suit your needs best. You may want one that provides you the golden privilege to be flexible with your work schedule, maybe using weekend hours for example.
Whatever your choice may be though, make sure to show all of your skills to ensure that people notice your advancements as a real estate investor. The great thing about real estate investing careers is they tend to be among some of the highest-paying positions in any market!
Making real estate your career path may or may not require that you obtain degrees in real estate or certification courses from a university or college. The adverb “may” implies that it is not compulsory to undergo a university program to work or invest in REITs.
Some who venture into the world of real estate investing and its career paths did not learn finance & investing in school. These individuals most likely learned from friends who are serious investors or brokers or from enrollment into online courses that taught them sufficiently to begin their careers.
These courses can assist you to navigate your way to real estate careers and job opportunities. They put you through commercial property management, accounting for real estate, good debt financing, sales and closing, and real estate best practices.
The main career pathway with REITs that Cortney Luke suggests from ArrestYourDebt.com is to apply for a job position in the company’s headquarters. if you get employed, your job position should make you responsible for locating properties and overseeing their daily operations.
Nevertheless, there are other entry-level jobs can lead to careers in real estate. Many companies work with independent brokers who represent the company’s properties and conduct screenings on potential tenants. This leads to property managers, leasing agents, and client representatives. If
Do REITs pay monthly dividends?
Residential and diversified real estate investments do pay monthly dividends. The monthly income comes from mortgage and rent. REITs are reported to have an average return of 10.5 percent, just like traditional rental (landlord-tenant) real estate investment systems.
Meanwhile, managers of real estate investment trusts (REITs) know that their investment trust funds exceed the assumed 10.5 percent average yearly return. REITs are speculative and rely on high-yield debt financing to make better-than-average returns on real estate properties and developments.
So do they pay investors monthly dividends? Yes, they surely do so while collecting a small management fee. Some HNWIs make a decent amount of passive income from REITs, but the harsh reality is that you will probably need at least $100,000 to earn $1,000 a month as a retail investor.
As a rule of thumb, the more you invest into REIT corporations the more dividends you’ll be paid and the more attention they’ll give you being one of their highest contributors to the trust.
Can you get Rich From Real Estate Investment Trusts?
The answer to this is not direct. You may or may not get rich from REITs. Why? Because you often need a huge amount of money each month to put into the trust before you can start seeing a few thousand dollars a month.
A few good millions will set you up to earn a 6-figure passive income. And that lies the problem… most retail investors don’t have millions to spare for RE investments but rather they’re trying to get millions from the RE market.
Meanwhile, you stand a chance of losing your invested capital into REITs since no financial investment is guaranteed for 10%, 50%, or 100% profits at all times. It is recommended that you start investing small amounts and use dollar-cost averaging to grow your shares in REITs.
In the meantime, it is preferable that you use your earned salary or business revenue on basic needs and investments of other kinds rather than concentrating half or more of your wealth into REITs alone.
Real estate investment is said to have “produced a number of millionaires” for decades. it is a relatively lower-risk asset class compared to stocks and crypto. However, real estate is not for everyone.
Some people just add REITs to their portfolio just to diversify the high risk of drawdown associated with capital market investments such as stocks, collectibles, crypto, and CFDs.
You can pursue the career of becoming a real estate investor and still work with a REIT firm. That way, you earn while you learn and gather more experience to become the next Warren Buffett or Donald Trump.