Real estate investment trusts (REITs) are companies that own or provide financing for income-producing real estate in a variety of sectors. While real estate is competitive in terms of job opportunities, many jobs are available in real estate investment trusts, provided a prospective employee has the necessary skill sets to succeed in the real estate industry.
Real estate can be an incredibly lucrative investment, assuming you have a good investment plan in place. The main benefit of investing in real estate is that it generally increases in value over time, and you can also use it to generate income in the short term. On top of that, real estate is one of the easiest assets to leverage for an investment; the average middle-class family in the United States leverages their house to obtain a mortgage.
On a much larger scale, millions of dollars of capital are deployed in the real estate sector every day by real estate investment trusts. An employment opportunity in the REIT industry can offer you a diverse array of experience that will teach you the fundamentals of real estate investment while, ideally, also earning you a pretty decent paycheck every month.
What are real estate investment trusts?
Real estate investment trusts, or REITs, are large companies or funds that manage a portfolio consisting of real property across different sectors. REITs were created based on the belief that smaller investors should be able to access income-producing properties. Before that, real estate projects and properties in the commercial and industrial sectors were out of reach for most real estate investors, as they required a significant amount of capital to buy.
Real property spans a wide variety of sectors and industries, but these are some of the main focuses of REITs that you may or may not be familiar with.
Residential real estate investment trusts
Residential real estate investment trusts focus on obtaining residential properties and renting them out to tenants to generate income. Residential REITs typically focus on larger residential buildings that host many tenants at once. Student housing and multifamily properties are examples of the types of homes that residential REITs invest in.
Commercial real estate investment trusts
Commercial real estate investment trusts focus on acquiring commercial real estate that can be used for commercial purposes. Office-focused REITs own buildings or portions of buildings to rent out to businesses. Retail REITs own spaces that host retail businesses with a focus on selling products. Commercial properties can be used for most purposes associated with business operations.
Industrial real estate investment trusts
Industrial property can produce very high rental yields and thus is a favorite in the REIT sector. Industrial real estate investment trusts mainly rent out factories and warehouses to other businesses. For example, a distribution center — that is, the place where your online order comes from — is a type of building that an industrial REIT might manage. Real estate projects related to manufacturing are also managed by industrial REITs.
Resort/hospitality real estate investment trusts
Resort and hospitality real estate investment trusts focus on properties related to the travel sector. Hotels and resorts around the world are usually owned by REITs rather than individuals.
Medical real estate investment trusts
Medical real estate investment trusts acquire such buildings as hospitals and care homes. REITs focusing on elderly care and nursing home properties tend to do well, especially as the U.S. and global populations continue to age.
How many jobs are available in real estate investment trusts?
Within the real estate industry as a whole, the REIT industry offers a variety of both white-collar and blue-collar job opportunities. According to a recent study for Nareit, real estate investment trusts contributed about 2.9 million jobs to the U.S. economy in 2020, with about 308,000 full-time employees directly employed by REITs. Currently, real estate investment trusts in the United States own an estimated gross total of $3.5 trillion.
Prospective REIT employees with a background in finance and economics will be able to get the best-paying jobs in investment analysis and financial product structuring. And as with most industries in the modern age, a computer science background is incredibly valuable as well.
Blue-collar jobs are available in real estate investment trusts as well. REITs handle properties that produce income in the real estate industry, and all of these need to be maintained. Construction- and maintenance-related skill sets can make you a shoo-in for work in the property maintenance sector of a real estate investment trust. Real estate property appraiser and real estate agent are also positions that are consistently available in the REIT industry.
In short, don’t worry if you don’t have a background in real estate or a master’s degree in real estate finance from Stanford, as there are many jobs available for all types of workers in the real estate market. A white-collar worker may need an investment background or soft skills such as management, while a blue-collar worker would need to be skilled in maintenance.
White-collar jobs in real estate investment trusts
White collar jobs in real estate investment trusts mostly involve finance, economics, and various soft skills. Here are some of the more common jobs in REITs:
Real estate agent
Becoming a real estate agent is pretty simple: take a test and get your license. Being a good real estate agent, on the other hand, is a totally different story. If you’re personable and skilled in sales, this could be a promising career path for you. For a real estate investment trust that needs to unload assets quickly, good real estate agents are invaluable.
Looking to get a mortgage so you can start investing in real estate yourself? Here are some of the best mortgage lenders with the most competitive rates on the market.
Real estate investment analyst
An investment analyst is typically an entry-level (or close to an entry-level) position in the world of finance. A REIT analyst might be tasked with analyzing the viability of an asset based on occupancy variables or determining the demographic changes in a particular market. A background in asset management is a big advantage for this job. If you have a degree in finance or accounting, you would likely do well in this role.
Capital market analyst
A real estate investment trust will typically use as much leverage as possible to achieve the greatest return on its investment. A capital market analyst analyzes and models out the financing tied to a real estate investment trust’s assets. Whether interest rates rise, drop, or stay the same, a good capital market analyst is able to model out all scenarios in order to mitigate as many losses and achieve as many gains as possible.
Human resource manager
A real estate investment trust has many people working in a variety of positions. In order to make sure operations run smoothly, a human resource representative — or HR rep, as they’re commonly known — with good management and people skills is essential. Typically, university graduates who majored in communications are well suited to work in human resources.
Computer and IT specialist
Every large company needs computer and IT specialists to run the technological components of the business. A real estate investment trust might have its own proprietary software or otherwise require round-the-clock expert maintenance. Furthermore, any technology related to the functioning of an asset will need IT and computer professionals to operate it.
Blue-collar jobs in real estate investment trusts
While the higher-paying jobs are mostly carried out behind a desk, blue-collar jobs are also readily available in REITs. Unlike other funds that invest in stocks, REITs invest in real properties that require maintenance, so you’ll often be able to find job opportunities helping to manage and maintain these properties.
Many REITs will own huge properties that house multiple tenants. Property management is the lifeblood of a real estate investment trust’s consistent income, as maintaining these properties is paramount to keeping existing tenants happy and attracting new tenants over time. Prospective employees who are adept in a wide variety of maintenance skills, such as heating/cooling and plumbing, will do well in this role.
A leasing consultant is a salesperson who leases properties out to tenants. A leasing consultant can work independently, but some leasing consultants work directly for REITs. The real estate industry can’t function without tenants paying rent, so leasing consultants are of utmost importance to real estate investment trusts.
REIT business model
Investing in a real estate investment trust is similar to investing in a stock that pays dividends, except you are mainly investing in real estate assets. A REIT’s main focus is to generate as much income as possible from the properties it owns. By law, REITs are required to pay out 90% of this income to their shareholders in the form of dividends.
If you’re looking for recurring income in the form of regular dividend payments, you may want to consider investing in a real estate investment trust. The largest selling point of REITs is that they take the hassle out of direct real property ownership. For example, if you were to buy a nursing home, you would have to deal with the incredibly daunting amount of time and capital expenditure on its maintenance and upkeep. A REIT would manage all of this on your behalf, leaving you free to simply collect the income via dividends.
Like typical funds, real estate investment trusts make money from the underlying mortgages of the real estate they own and a portion of the income their properties generate.
How many members does a REIT have?
To qualify as a REIT, a company must have at least 100 shareholders.
Can a REIT have employees?
Technically, the company holding a REIT or real estate project has no employees. However, the companies directly associated with the REIT will have employees.
Is real estate investing a full-time job?
Depending on how you manage your time and assets, real estate investment can be a full-time or a part-time job.
How do REIT managers make money?
REIT managers make money from the underlying mortgage securities behind the trust’s assets, as well as a portion of the income produced by those assets.
Who controls a REIT?
A real estate investment trust is controlled by the company that owns the REIT.
- A real estate investment trust, or REIT, is a company that owns income-producing real estate properties.
- REITs were developed to give small investors a chance to invest in larger real estate assets.
- REITs have a variety of both white-collar jobs, such as REIT analysts, and blue-collar jobs, such as property managers.
- REITs make money from a portion of the income generated by their properties and the mortgages underlying those properties.