In the US, REIT stands for Real Estate Investment Trusts. The real estate industry is booming which is great news for real estate investment trusts as they grow further. Anyone seeking a career opportunity with a REIT can enjoy hearing the news that there are plenty of jobs available. How many jobs are available in real estate investment trusts? What kind of roles are available in the REIT industry?
This guide will explain how many jobs are available, how these real estate investment trusts work, and much more.
What Are Real Estate Investment Trusts
In the United States, there are more than 225 REITs with a combined market capitalization of over $1 Trillion. A real estate investment trust (REIT) is a public investment vehicle listed on a Stock Exchange. Furthermore, investors can even buy REIT ETFs to spread their investments among many real estate asset classes.
A REIT owns and runs income-generating real estate and related income-producing assets. Moreover, the REIT could own buildings including offices, hotels, resorts, and more. However, real estate bought by the REIT isn’t for future resale. Instead, the property owned by the REIT is for development. Then, the property gets used as part of the investment portfolio to generate income.
Investors can buy and sell these assets easily and at a low cost. REITs also have much better liquidity than traditional real estate investments. Listings for REITs are on the New York Stock Exchange, American Stock Exchange, and the NASDAQ. Furthermore, investors can get indirect access to REITs through mutual funds.
Investing in REITs allows groups of investors to make real estate scale investments that otherwise wouldn’t be possible. Smaller real estate investors can get access to larger real estate investments by investing in a REIT.
As the REIT sector continues to grow and diversify, analysts predict that many more jobs will become available in the industry.
How do Real Estate Investment Trusts Work?
In 1960, Congress created real estate investment trusts. The aim was to give everyone the chance to benefit from investing in income-producing real estate. To be sure, investing in a REIT is the same as investing in any other industry. Investors buy stock and shareholders the real estate investment trusts pay the shareholders the majority of the income.
When REITs were first created by Congress, there were a set of rules established that REITs must follow. All REITs must be modeled after mutual funds, treated by the Internal Revenue Code as a corporation, and widely held by shareholders.
In addition, REITs must primarily own or finance real estate, and own real estate with a long-term investment horizon.
The Internal Revenue Code stipulates that at least 75% of the corporation’s income is either from rent from real estate, real estate interest, or the sale of real estate assets. The corporation must have at least 75% of its assets in real estate and 95% of the corporation’s income must be passive.
Are REITs a Good Investment?
Anyone wanting to diversify their investment portfolio without increasing the risk too much should consider investing in a REIT. There is still some risk as no investment is perfect, but there are some good benefits of growing wealth by investing in a real estate investment trust.
The way a REIT works means it doesn’t pay corporate tax. Dividend stocks often face double taxation: at the corporate and individual levels. The good news is that REITs are not taxed at the corporate level which means they enjoy a huge tax advantage.
REIT must pay 90% of taxable income to shareholders. Many REITs often have a dividend yield of over 5%, but average stocks have a yield of less than 2%. This makes investing in a REIT ideal for anyone looking for income or more to reinvest.
Real estate values tend to keep growing over time. As a result, many REITs can capitalize by selling valuable properties and using the capital elsewhere. Many REITs provide returns far exceeding the market thanks to these strategies.
REITs are Ideal for Smaller Investors
Small real estate investors can invest in a commercial real estate portfolio that would otherwise be inaccessible. Most people can’t buy an office tower or shopping center themselves. Thanks to the creation of REITs by Congress, now anyone can invest in these types of buildings and enjoy receiving a return from them.
A sound financial plan means having a diverse investment portfolio. REITs work just like investing in the stock market, but instead of equities, it’s real estate. Investment advisors recommend owning real estate in an investment portfolio as real estate usually keeps its value even in an economic crisis. Investing in a REIT often means having a steady income.
If someone owns real estate, then it can take a while to sell. However, a REIT investment is easy to buy or sell at the click of a button. Having this level of liquidity makes REIT an attractive proposition.
Real Estate Industry Job Statistics
According to the United States Department of Labor, the need for property managers, real estate brokers and sales agents continues to grow. Average wages in the industry are $51, 220 per year with hundreds of thousands of people employed in the industry across the US.
In the REIT sector, average wages far exceed that of real estate brokers. The average Real Estate Investment Trust (REIT) analyst earns $108,164 per year as of June 2022 – which is more than double the amount of real estate brokers and sales agents. However, the salary range is generally between $76,495 and $145,071
There are 274,000 employees employed on a full-time basis by REIT organizations. An estimated 2.6 million full-time jobs are an indirect result of real estate investment trusts.
The good news for anyone seeking a career working for a REIT company is that growth is happening. This means plenty of employment opportunities and the ability to command a significantly higher wage than other parts of the real estate industry.
Types Of Jobs Available In Real Estate Investment Trusts
There is a wide range of jobs available in the real estate investment trust (REIT) industry. To understand this better, here are the job descriptions of the main roles that are available.
Development is responsible for building new projects. Working in this role is ideal for anyone that is looking for project management work. As well as developing new projects this role also involves working with others to finance the development.
Development jobs in the REIT industry are highly sought after as they pay well, are challenging, and are highly respected.
Acquisition jobs within real estate investment trusts are roles that involve sourcing new investment opportunities. And, these roles make sure that deals get done. Further, these roles are in REITs and pay well. The work is heavily finance-related and suits anyone with a degree or background in finance, marketing, business, or capital markets.
Property Management Roles
Property managers are responsible for overseeing the operation of a property – leasing, maintenance, collections, and anything else as required.
There are no minimum requirements for becoming a property manager. Ideal candidates include those that can handle a variety of situations and have good project management skills.
Starting as a property manager in a REIT is often a great opportunity. This is because when other roles become available within the organization there is a good chance for career progression.
Asset Management Roles
Asset Management is a job that looks after the operational and financial health of the real estate investment trusts’ portfolio. An asset manager needs to manage the client assets in line with the investment goals and agreed preferences. Asset managers develop, organize and maintain client portfolios.
A good asset manager will need to be capable of working with a variety of other teams. Acquisitions, accounting, development, and finance all interact with asset managers to work together on achieving results. At the same time, they must ensure compliance with the SEC, REIT regulations, and Sarbanes-Oxley.
It’s not unusual to start out working in acquisitions or property management, then move up to become an asset manager of residential or commercial properties. Alternatively, anyone with the skills should be able to land an asset management role straight away.
Investor Relationship Roles
Investor Relations are responsible for coordinating and handling all communication with REIT shareholders. The role pays well and is ideal for anyone coming from a finance or accounting background.
The investor relations team will organize the annual meeting and meeting documents which include the annual report and proxy statement. And, all this must get done in accordance with SEC regulations.
Anyone with a background in accounting or finance would make a good candidate to apply for this role.
How Many New Real Estate Investment Trust Jobs Are There?
Now, if you’re wondering how many jobs are available, data from LinkedIn shows that there are currently over 1000 jobs available within real estate investment trusts. That’s just one site and a great indicator that there is lots of opportunity in the field.
The REIT industry is a sector that is growing fast. As well as needing investors, many other support roles need to be filled regularly.
The real estate investment trust industry is already sizeable and continuing to grow. Working for a REIT means following strict protocols for reporting and regulations. Many jobs within real estate investment trusts require the applicant to have a background in accounting or finance.
However, other roles are available that don’t have these restrictions. Once working in a REIT organization, it’s then possible to move up to other roles should one become available.
There are two types of REIT – equity REITs or mortgage REITs.
Equity REITs aspire to own a variety of property types. Commercial properties such as offices, hotels, shopping centers, and many more. Rent from these properties is the source of most of the revenue of an equity REIT.
The other type, a mortgage REIT, seeks to finance residential and commercial properties. Most of their revenue is from interest earned on their investments in mortgages or mortgage-backed securities.
Yes! It’s possible to work for a REIT. The highest-paid real estate investment trust jobs listed above include working as an asset manager, property manager, or investor relations.
These aren’t the only roles available. The support staff is always needed as well – HR, administrators, and legal roles are some of the other jobs that will be available in the REIT industry.
To work in a REIT specific role, applicants will need a background in finance, accounting, or real estate. Many roles will require that the applicant holds a relevant degree. REIT-specific