If you like the idea of managing rental properties or being involved in real estate investing without directly risking your own money, going to work for a real estate investment trust (REIT) is a great career path for you to consider. People who work for REITs may analyze real estate investment opportunities, oversee the development of income-generating real estate, or manage rental properties on behalf of investors.
What Is a REIT?
A real estate investment trust (REIT) is a highly regulated investment firm that generates revenue for investors through real estate rather than via stocks and/or bonds. A REIT owns and operates (or buys and sells) properties on behalf of a group of investors. Many apartment communities and commercial buildings and developments are owned and overseen by REITs.
- The people who invest in REITs are able to make money by investing in real estate without having to directly own or manage individual properties.
- Most REITs are publicly traded, with investors buying and selling shares the same way they would if they invested in a mutual fund.
- The way REITs are structured allows investors to stay liquid rather than having a significant amount of money tied up in individual property ownership.
- REITs are required to distribute most of their income to their investors. What is not distributed must be used to purchase more property or to otherwise invest in growing the company.
The properties held by a REIT have to be properly managed in order to maximize returns for investors. According to the Securities and Exchange Commission (SEC), publicly traded REITs typically have employees who manage their investments, while non-traded REITS do not. Instead, REITs that are not traded usually contract with third-party real estate management firms.
Examples of Jobs With REITs
If you go to work for a real estate investment trust, you will be involved in some aspect of managing, acquiring, or developing real estate for the purpose of generating a return on investment (ROI) for a pool of investors.
Property managers are responsible for overseeing the day-to-day operations of individual properties owned by a REIT. Some property managers work with just one property, while others oversee a portfolio with multiple properties. People who do this kind of work oversee leasing, collect rent payments, enforce lease provisions, deal with evictions, ensure proper maintenance, and all other tasks associated with operating income-generating real estate. They supervise employees who are responsible for specific functions (such as leasing or groundskeeping) and contract with vendors to provide services not handled by in-house staff. The median pay for property managers is around $60,000 per year.
Rather than dealing directly with day-to-day operations, REIT asset managers focus on maximizing financial performance and ensuring compliance with applicable regulations. The compliance aspect of this job can be quite complex, as special rules apply to REITs in particular, in addition to the SEC and Sarbanes-Oxley Act (SOX) regulations that apply to all publicly traded organizations. Some REITs have an executive-level asset manager who oversees individual asset managers, each of whom is assigned a select group of properties within the company's portfolio to manage. These jobs typically require a bachelor's degree in finance or business. The average pay for REIT asset managers is around $84,000 per year.
People who work with REITs as acquisitions managers primarily focus on identifying new opportunities for the company to build its portfolio. They identify and analyze properties available for sale and look for sites appropriate for new developments that have the potential to enhance the company's portfolio. They handle negotiating property purchases and dealing with the various steps involved in closing real estate transactions. They may also be involved with selling properties that the company is seeking to divest from its portfolio. These jobs generally require a degree in business and expertise in large-scale real estate developments. The median pay for property acquisitions managers is around $120,000 per year.
Investment analysts who work with REITs are financial analysts that have to be knowledgeable about real estate markets and regulations, as well as financial factors that impact the value of properties. They focus on helping the companies they work for make wise property purchase and divestiture decisions in order to maximize ROI for investors. They also often conduct cost-benefit analyses to determine whether property improvements or other changes that the company is considering make sense from a financial perspective. This job requires a high degree of expertise in finance, including at least a bachelor's degree in a related field and/or an MBA. The average pay for REIT financial analysts is more than $100,000 per year.
Investor Relations Associate
REITs often have employees who focus on strengthening relationships with investors while also meeting reporting requirements. Investor relations associates handle communications that go to the REITs shareholders. They prepare documents that are required to be shared with investors, such as the annual report that is sent to investors, as well as the proxy statement that is sent out to them. They also plan the annual meeting and may be involved with SEC filings. This job requires communication and writing skills, financial expertise, and knowledge of SEC and SOX regulations. This type of job usually requires a degree in business, public relations, or a related field. The average pay for investor relations roles is around $47,000 per year.
Is Working With a REIT Right for You?
Working with a REIT is a career path that combines real estate knowledge with corporate finance expertise. If you are interested in these fields and willing to gain the education and experience necessary to succeed with a REIT, then this may be a great field for you to pursue. Before you decide, continue to research other related options. Take the time to explore various careers in real estate and other options for finance jobs. By considering multiple options within your areas of interest, you're sure to find a career path that's right for you.