Taking investing as a profession has become quite lucrative due to more opportunities opening up. It comes up with more unique, exciting ways to earn a living. A career path in real estate may be THE career path some people may strive for. And many ask, ‘Is real estate investment trusts a good career path?”
As the real estate industry grows to newer levels, Real Estate Investment Trusts, or REITs, has become a lucrative field of investment.
This entity allows an individual to invest in commercial real estate to generate revenue. The firms managing commercially owned real estate partially enable their investors to own the property.
A Real Estate Investment trust is essentially a dividend-paying stock. REITs allow an individual to broaden their portfolio; it provides high dividends while having low risk.
This field of investment can also be an exciting career path for people trying to build a solid career in real estate. The dimensions of Real Estate Investment Trust are huge, and one can benefit from it.
Is Real Estate Investment Trusts a Good Career Path?
The best part about choosing this career is that you get to be your boss. That means, how much you earn depends totally on your performance. Someone else will not hold you back, and you also get to maintain your own working hours.
Working in this industry benefits anyone with skills and knowledge regarding real estate investment. Being good at what you do here attracts investors willing to pay a hefty fee to manage their funds.
Types of Real Estate Investment Trusts
There are three types of Real estate Investment Trusts based on ownership:
Publicly Traded Real Estate Investment Trusts
The Securities and Exchange Commission regulates Publicly Traded Real Estate Investment Trusts. These REITs are listed on the NSE and publicly traded by investors domestically or internationally.
Private Real Estate Investment Trusts
Private REITs are not traded on the national stock exchange nor regulated by the securities and exchange commission. Institutional investors looking to invest in income-producing properties usually buy Private REITs.
Public non-traded Real Estate Investment Trusts
This type of REITs is the most stable and can deliver a steady flow of returns in the long run. However, they are not listed in the NSE and cannot be traded. They are not as liquid as their counterparts.
Is Real Estate Investment Trusts a Reliable Field of Employment?
Before we answer the question, we need to know the opportunities and different variations of positions one can hold while exploring the depths of real estate.
The jobs vary in responsibility, and it has a wide range of salary options.
A developer works with contractors and subcontractors to design and construct projects. A Developer, also known as a development executive, is responsible for building new properties entirely.
Depending on the type of REIT, one can earn up to six-figure salaries and explore other money-making opportunities.
The job of a real estate analyst entails detailed research and analysis of the real estate market and data and aiding in investment decisions for the company using various available financial tools.
Asset managers working with REITs are responsible for the financial and operational aspects of portfolio assets; they aid the investors in making better investment decisions and help them out of lesser financially rewarding investments.
Asset managers ensure that the investor gets a higher return on their investment through their knowledge and expertise of the market.
Real Estate Property Appraiser
Real estate property appraisers are individuals who appraise and determine the value of assets; this knowledge comes in clutch when managers try to decide where to invest the investor’s money.
Not all properties have the same value. A skilled appraiser can determine the best place to invest in, which will appreciate the investment’s value.
Pros and Cons of A Career In Real Estate Investment Trusts
REITs deals with real estate assets that produce income for the investor, not just numbers. REITs managers’ investment decisions can result in massive turnovers for both the firm and the investors.
Now, the question remains, “Is it advantageous to have a career in the real estate investment trusts industry?” We would like to have a look at the advantages and disadvantages of working in this industry.
One advantage of working in the Real Estate Investment Trust industry is that it’s easier to manage than traditional securities. REITs prefer investing in different assets by diversifying the risk. The returns on real estate investment need to pay moderate taxes, unlike other investment returns.
Unlike traditional securities, REIT’s rates are usually less fluctuating; the interest rates do not change as much, making it a much better investment as it appreciates in value.
The investment processes are appropriately executed while prioritizing the investor’s interest, which is reliable. Besides, the investors know where their money goes.
Dividend returns are usually high in REITs. Approximately 90% of the profits are either reinvested in the company through management decisions or paid to investors.
REITs perform well in the long run; they have proven to be better economically than traditional securities.
Investing in Real Estate Investment Funds is a good decision. As the funds rotate consistently and are bought and sold regularly, ensuring the cash flow is easy.
High Management Fee
Management fees are often high in such funds. Managers must decide on investment and reinvestment decisions meticulously, which often translates into higher fees.
The returns of REITs are usually high. But the risks of investing in these trust funds are multifaceted. Because the property valuation, geographic location, and tax laws can often differ in different places.
Lack of Control
The investors usually have little to no say in the investment decisions. As that is traditionally the responsibility of the managers. The institution and managers do property ownership, trading, and fund management.
Working in REITs is beneficial as it can help them achieve their financial goals. If numbers and properties are someone’s forte, they will be pleased with their jobs because the perks are pretty lucrative.
The willingness to do this job varies from person to person; it may be well suited for an individual but not so much for others. Suitability depends on how one can take advantage of the tools they are provided with.
If one knows how to use their financial expertise, they will be able to have a fulfilling career.
We can conclude that working in Real Estate Investments Trusts can be a good career path to choose. That is if you know the game.
What are your thoughts on this? Is Real Estate Investment Trusts a good career path?