While we make an investment in something, it’s not just we invest money. We actually invest our time and our mind along with money. Thus, it’s very apparent that we will think about the returns on our investment. If you are considering making a career in investments, you must consider real estate investment trusts due to the significant stock returns and long-term capital appreciation. However, you might wonder, is real estate investment trusts are a good career path. As real estate provides several career options, the answer to the question is no doubt yes. However, when it is about your career, for obvious reasons, you have to be very practical and understand the advantages and disadvantages of REITs. This article helps you to understand an overview of career options in REITs and explains whether you should consider your career in REITs.
What are REITs?
Real estate investment trusts are where you can invest in funds along with other investors on the finance generating real estate. A group of people who are the shareholders of the company is responsible for operating the funds. Therefore, you invest in a certain portion of the whole project of real estate, either in its equity or its debt. Real estate investment trusts include investment in commercial properties such as hospitals, private schools, shopping malls, hotels, warehouses, etc. As REITs are effective sources of income, there are also several job opportunities.
However, there are some conditions to qualify a company as a real estate trusts such as-i) At least 90% of the taxable income of the company has to be distributed to the shareholders, ii) Five or fewer people should have ownership of half of the company’s share, iii) A third-forth portion of the total assets of the company has to be invested in real-estate, iv) The responsibility of managing the company should be on the board of directors or the trustees.
Types of REITs:
There are different types of REITs where you can invest such as-
i) Equity REITs:
The investment in equity REITs, you are actually investing in finance generating property management where the company holds the ownership of properties. For instance, you can invest in shopping malls, apartments, etc., and play the role of financial investors without taking any responsibility of managing the properties. The shareholders get their payment of equity REITs from the profits of selling properties or rental income.
ii) Debt REITs or Mortgage REITs:
Instead of holding any property, here, you can finance the properties or you can invest in mortgage assets. Here, you can earn on the interests that depend on the performance of the market.
The assets of REITs include commercial projects where you can invest in private schools, hospitals, retail shops, etc. Different types of properties and commercial constructions come under this category.
Advantages & Disadvantages of REITs:
Before you choose a career in investment, you need to understand the advantages and disadvantages of real estate investment trusts.
- As REITs allow you to start your journey of investment with a little capital, there is an opportunity for anybody to invest in real estate and earn a significant amount of return.
- The huge liquidity of REITs allows you to earn money fast and even in few days, you can have your funds back through selling the shares.
- Easy diversification of REITs helps you to differentiate the risks through investing in an array of profitable properties.
- The developers and the managers who involve in the investment of REITs are trustable and they pay their debts on time.
- The taxation is very simple in real estate investment trusts.
- The most significant disadvantage is that the investment in real estate is risky because you can face debt if the occupants vacate the property.
- As several economic and political factors influence real estate, the values of real estate fluctuate.
- In order to manage the debt and property, you need to rely on others’ actions and therefore, everything is not in your hands.
Benefits of Real Estate Jobs:
Real estate jobs are very much different from traditional jobs. However, there are several benefits of acquiring a career in real estate investment trusts.
- You can run your business according to your choices and rules and also can involve in contractual works.
- Although you don’t have a monthly salary, you can earn according to your contribution on sale and profit.
- There is no bound routine for you to work, thus, you can arrange your own routine.
There are several career options in real estate investment trusts. However, this article will explain some highest-paying REITs jobs that can help you to build a successful career.
1. Development Executives:
If you have good knowledge about development materials and sites, you can build your career as a development executive. Executives work on residential and commercial property projects. This is teamwork and if you think that you are a good team member, you can start your career as a development executive. In order to conduct property development, the development executives work with the contractors and subcontractors.
2. Property Managers:
The most significant way to earn money in real estate jobs is property management. A property manager involves in handling the property dealings of individuals. In order to grow their businesses, property managers focus on providing effective customer services. If you have knowledge in property dealing and you can provide satisfaction to the customers, you can start your career as a property manager to earn money.
3. Asset Managers:
Asset managers are responsible for looking after the assets of the investors. The role of the asset managers is to take care of the operational and financial performance of the portfolio assets. If you have knowledge in finance, commerce, investment banking, and asset management, you can consider starting your career as an asset manager.
4. Acquirement Analysts:
In order to find new opportunities for investment in this competitive market, it is important to analyze the development programs, growth chance if any investments, etc. Acquirement analysts help the investors to make investment decisions by analyzing the financial market.
There are several job opportunities in REITs and you can earn a lot of money if you have good knowledge of finance and economics. Thus, when you ask, is real estate investment trusts are a good career path, the obvious answer is yes. However, you need to assess which career path is suitable for you.