In the past few years, there has been a big transformation in the way people invest their money. Investing means putting your money into something with the hope that it will grow and make more money for you in the future. Traditionally, people have often invested in things like stocks, where they buy a small part of a company and hope its value goes up.
However, lately, there has been a significant change in how people approach investing. This change has been influenced by recent events, like the COVID-19 pandemic. After the pandemic, the job market has shifted, and people are now more interested in investing in traditional business domains rather than trying out new and unfamiliar ones.
One such traditional domain that people have been investing in for a long time is real estate. Real estate means properties like buildings, shopping malls, or apartments. People used to buy these properties and earn money by renting them out or selling them when their value increased.
But here’s where REITs come in. Real Estate Investment Trusts (REITs) are a way for people to invest in real estate without having to buy a whole property by themselves. Instead, people pool their money together and buy shares in a REIT. This way, they become part-owners of multiple real estate properties.
Now, let’s talk about the jobs available in the field of Real Estate Investment Trusts. When you have a REIT, you need people to manage and take care of the properties it owns. There are different jobs in this field, such as property managers who make sure the buildings are well-maintained, accountants who handle the financial aspects, and marketing professionals who promote the properties to attract tenants.
What is Real Estate Investment Trust (REIT)?
REITs are like special groups that focus on investing in different kinds of real estate properties. Instead of owning these properties themselves, they acquire or provide funding for income-producing properties. It’s kind of like having a collection of different real estate properties without actually owning them individually.
By having these portfolios of properties, investors can spread their investments across a variety of real estate properties. This helps them take advantage of the income these properties generate. It’s like having a bunch of eggs in different baskets, so if one basket doesn’t do well, the others can still make money.
There are different types of REITs that you should know about:
- Equity REITs: These REITs focus on properties like hotels, apartment buildings, and other types of buildings that generate a lot of rental income. They make money by collecting rent from tenants.
- Mortgage REITs: Mortgage REITs make money through the interest paid on loans they provide for real estate properties. They own the mortgages on these properties and earn income from the interest payments.
- Hybrid REITs: Hybrid REITs use a combination of equity (rental income) and mortgage (interest income) strategies to make money. They have a mix of both types of investments in their portfolios.
REITs were created to give regular people the opportunity to invest in large-scale real estate projects. When you invest in a REIT, you’re essentially buying shares, just like when you invest in a company’s stock. These shares represent your ownership in the REIT and its underlying properties.
Types of Real Estate Investment Trusts
There are different types of REITs. Let’s dive deeper into the different types of Real Estate Investment Trusts (REITs) and explore some of the benefits they offer.
- Office/Industrial REITs: These REITs invest in properties like office buildings, business parks, and industrial complexes. They cater to businesses that need space for offices, manufacturing, or warehousing.
- Lodging/Resort REITs: These REITs focus on hotels, resorts, and other hospitality properties. They generate income from room rentals and other services provided to guests.
- Health Care REITs: These REITs invest in healthcare-related properties such as hospitals, medical centers, nursing homes, and assisted living facilities. They benefit from the growing demand for healthcare services due to the aging population.
- Data Centers REITs: These REITs own and operate data centers, which are facilities that house computer servers and equipment. They benefit from the increasing demand for data storage and processing.
- Residential REITs: These REITs primarily invest in residential properties such as apartments, single-family homes, or student housing. They earn rental income from tenants.
- Infrastructure REITs: These REITs focus on properties related to infrastructure, such as toll roads, bridges, airports, or communication towers. They generate income from usage fees or lease payments.
- Retail REITs: These REITs own and operate shopping malls, retail outlets, or grocery stores. They earn income from rental payments made by retail businesses.
- Timberlands REITs: These REITs invest in forests and timberlands. They generate income by selling timber and leasing the land for recreational activities like hunting or fishing.
- Diversified or Combination REITs: These REITs have a mixed portfolio that includes properties from multiple sectors, providing diversification.
- Mortgage REITs: Unlike other types of REITs that focus on owning properties, mortgage REITs invest in real estate mortgages. They earn income from interest payments on the mortgages they hold.
- Specialty REITs: These REITs focus on niche markets like self-storage facilities, casinos, or movie theaters.
REITs have gained popularity among investors. In recent years, around 145 million Americans have invested in REIT stocks. Many individuals are exposed to REITs through their employer-sponsored retirement plans like the 401(k). These trusts offer several benefits, including dividend yields (regular income payments), independence from the performance of the S&P 500 (a stock market index), easy liquidity (the ability to buy or sell shares easily), and advantageous tax savings.
By investing in REITs, individuals can diversify their investment portfolios, earn income from real estate without owning properties directly, and potentially enjoy tax advantages associated with these investment vehicles.
Total Numbers of Real Estate Investment Trusts Globally
As of December 2021, the total number of REITs worldwide was 865. That’s a pretty big number! These REITs are spread across different countries and regions around the globe. It’s interesting to note that about 30 years ago, there were only 120 listed REITs in just two countries. So, the number of REITs has grown significantly over time.
Today, you can find listed real estate investment trusts in more than forty countries and regions. This means that REITs are not limited to just a few places, but are available in various parts of the world. One of the prominent countries with many REITs is the United States.
In the United States, there are many real estate investment trusts, although most of them are privately owned. However, there are also many publicly available REITs that are traded on major stock exchange markets. These publicly traded REITs allow people to invest in real estate by buying and selling shares on the stock market.
What Are The World’s Largest Real Estate Investment Trusts (REITs)?
The world’s largest real estate investment trusts (REITs) are determined by their market capitalization, which is the total value of their outstanding shares in the stock market. Here are some of the largest REITs globally:
- American Tower Corporation (AMT)
- Prologis, Inc. (PLD)
- Simon Property Group (SPG)
- Equinix, Inc. (EQIX)
- Public Storage (PSA)
- Digital Realty Trust, Inc. (DLR)
- Welltower Inc. (WELL)
- Crown Castle (CCI)
What Qualifies Real Estate Investment Trusts (REITs)?
For a company to be considered a REIT in the United States, it must meet several criteria:
- A company must invest at least 75% of its assets in real estate, cash, or U.S. Treasuries.
- It should generate at least 75% of its income from rents, mortgage interest, or real estate sales.
- The company must pay at least 90% of its taxable income as dividends to its shareholders.
- It needs to be a taxable corporation, meaning it pays taxes on its income.
- The company should be managed by a board of directors or trustees.
- After one year of operations, it must have at least 100 shareholders.
- No more than half of the company’s shares can be owned by five or fewer people.
When you invest in a REIT, it is similar to buying shares of any other publicly-traded company. You can also choose to invest in exchange-traded funds (ETFs) or mutual funds that hold a group of REITs together. It’s important to note that some REITs are private, which means they are not traded on stock exchanges and are not available for public investment.
Types of Best-paying Jobs Available at Real Estate Investment Trusts
There are various types of job opportunities available in Real Estate Investment Trusts (REITs). These jobs cover different areas and functions within the real estate industry. Here are some examples of the jobs you can find in REITs:
- Property Managers: These professionals are responsible for overseeing and managing the day-to-day operations of the properties owned by the REIT. They handle tasks such as tenant relations, property maintenance, and ensuring that rent is collected on time.
- Accountants: Accountants in REITs handle financial matters, including bookkeeping, preparing financial statements, and managing budgets. They help ensure that the REIT’s finances are well-managed and comply with relevant regulations.
- Marketing Professionals: REITs employ marketing professionals who promote and advertise the properties owned by the REIT. They create marketing campaigns, attract potential tenants, and work on strategies to maximize the occupancy rate of the properties.
- Real Estate Analysts: These professionals analyze market trends and data to assist in making investment decisions for the REIT. They evaluate potential properties, assess risks, and provide insights on the performance of the real estate market.
- Asset Managers: Asset managers oversee the overall performance of the REIT’s real estate portfolio. They monitor property values, rental rates, and market conditions. They also work on strategies to enhance the value and profitability of the properties.
- Legal Professionals: REITs often have legal teams or consultants who handle legal matters related to property acquisitions, leases, contracts, and regulatory compliance. They ensure that the REIT operates within the legal framework.
- Construction and Development Managers: These professionals are involved in managing new construction projects or renovation projects for properties owned by the REIT. They work with architects, contractors, and other stakeholders to ensure that construction or renovation projects are completed successfully.
These are just a few examples of the many job opportunities available in REITs. The real estate industry offers a wide range of careers, covering different aspects of property management, finance, marketing, analysis, and more. If you are interested in the real estate field, there are plenty of career paths to explore within REITs and the broader real estate sector.
So How Many Jobs Are Available in Real Estate Investment Trusts?
If you’re thinking about a career in real estate investment trusts (REITs), it’s natural to wonder how many job opportunities are available. The real estate industry has a lot of jobs for people to work in. According to the Bureau of Labor Statistics (BLS), as of February 2023, there are around 1.855 million people employed in the real estate industry.
Different roles in real estate may have different numbers of people working in them. For example, in 2021, there were about 144,000 real estate sales agents and approximately 44,000 real estate brokers. These are just a couple of the many roles available in the industry.
When it comes specifically to the REIT industry, estimates suggest that there are about 326,000 jobs directly related to REITs. Additionally, there are around 3.4 million jobs indirectly related to REITs. This means that REITs have an impact on creating jobs in other industries as well.
The number of job openings in the real estate investment trust sector can vary depending on where you live and the conditions of the market. On average, you might expect there to be anywhere from 1000 to 2000 job openings in the sector at any given time. That’s quite a lot of opportunities!
If there’s a particular role you’re interested in within the REIT industry, it’s a good idea to do some research to find out how many job opportunities there are. This can help you understand if that role is in high demand, which could increase your chances of finding employment in that field.
How Much Money Can You Earn Working in Real Estate Investment Trusts?
The amount of money you can make in any job depends on several factors, such as the company you work for, your level of experience, and your education. In the case of REITs, larger companies with higher profits usually pay their employees more compared to smaller ones. Similarly, smaller REIT companies may offer lower salary rates based on the profits they make.
According to estimates from Payscale, the average base salary for people working in the REIT industry is around $75,000 per year. This means that REIT jobs are often very lucrative and can pay better than jobs in other industries.
For example, if you work as a senior analyst in a REIT, you can earn approximately $80,000 to $90,000 per year. Senior analyst positions are quite common in the industry and tend to pay more than the average base salary. However, it’s important to note that these figures are just estimates and can vary from company to company.
It’s also worth mentioning that in addition to the base salary, some jobs in the REIT industry may offer additional benefits such as bonuses, commissions, and other incentives. These can further contribute to your overall earnings.
How to be a Real Estate Investment Trust Professional
Just like any other profession, working in the real estate investment trust (REIT) industry requires certain skills to be successful. These skills include finance, sales, accounting, investing, and what we call “soft skills.”
Soft skills are important because they help you work well with others and feel comfortable in a team. Jobs in the REIT industry can be demanding and require good results. So, it’s important to be passionate about this field and enjoy the work you do.
Having a degree related to business is helpful if you want to pursue a career in real estate investment trusts. This means studying subjects that teach you about managing money, conducting business, and earning a strong return on investment.
When you work in the REIT industry, you’ll be interacting with different people like investors, clients, and other professionals. That’s why it’s important to have good interpersonal skills, which means being able to communicate well and work effectively with others.
By developing these skills and being passionate about the field, you can become a successful professional in the real estate investment trust industry.
Trends to Watch Out for
The demand for real estate, which means properties like houses, buildings, and warehouses, can be influenced by certain trends happening worldwide. Here are a couple of important trends to keep an eye on:
- Population Growth and Urbanization: As more and more people live in cities, the cost of housing goes up. This means that it can be more expensive to buy or rent a place to live in many cities around the world.
- Rise of Ecommerce: Ecommerce means buying and selling things online. It has become really popular, especially during the COVID-19 pandemic when people couldn’t go to physical stores as much. Companies like Amazon have seen a huge increase in people buying things online. Because of this, there is a higher demand for warehouse space to store all the products that are being sold online.
- Potential for Industrial Real Estate Growth: Right now, ecommerce makes up only about 19.6% of all retail sales worldwide. If more and more people continue to buy things online, this number could go up. That means there might be a lot of growth and demand for warehouses and other industrial spaces where products are stored.
These trends can have a big impact on the real estate market, affecting things like the prices of houses and buildings. It’s important to keep an eye on these trends to understand how the real estate market might change in the future.
Real estate investment trusts (REITs) have emerged as a transformative investment option in recent years. With a focus on income-producing properties, REITs allow investors to participate in the real estate market without directly owning the properties themselves.
Whether through investing directly in REIT stocks or considering job opportunities within the industry, REITs provide a pathway for financial growth and engagement with the dynamic world of real estate. We hope you found this blog informative and insightful!