Real Estate Investment Trusts, or REITs in short, offer different high-income jobs for skilled individuals. This article will shed light on some of the best paying jobs in real estate investment trusts. More than that, it will explore why these companies came to be in the first place, how they operate, and how anyone can invest in them.
After that, we will extensively talk about the best paying jobs in real estate investment trusts. But in brief, the best paying jobs in REITs require a little more than a college degree. There are two essential factors to be qualified.
The first one is financial experience and sophistication. You can learn a lot about finance and real estate in college. However, a few years of real-world experience will teach you ten times what school taught you. So if you are a new graduate, be prepared for your new journey!
The second factor is communication and the ability to close deals. Closers in all sectors make good cash. So, merging financial sophistication with the skill of closing deals will give you access to greater jobs and bring more growth opportunities.
There are more than 1,100 real estate investment trust firms in the United States. 225 of them are publicly traded. Still, it is not quite simple to qualify as one. A firm should meet a variety of criteria to become a real estate investment trust company. Some but not all of these criteria are:
- Invest more than 75% of their total asset in real estate or U.S. Treasuries
- Never allow more than 49% of its shares held by less than 5 individuals.
- Pay 90% of its revenue to shareholders and investors.
More to be discussed about this, but before that, let us know what REITs are exactly!
What is Real Estate Investment Trusts?
Real Estate Investment Trusts are companies that were formed to make it easier for individuals to invest in the real estate market. In the past, people needed a lot of money to invest in real estate assets. Only wealthy capitalists could invest or co-invest back then, and no space was left for the middle or lower class. To avoid this monopoly, Congress formed the real estate investment trusts in 1960.
The companies’ system is basic. They pile investors’ money together and invest it in real estate cash cows. Investors can be anyone with relatively small or gigantic capital (as long as five investors do not hold more than 49% of the shares). And the cash cow can be a residential or a business building, a social facility, or even a mortgage.
The companies’ investment comes in the form of ownership (buying a real estate asset) or financing the asset. And they make a profit by leasing the properties and collecting the rent or by receiving a profit on investments.
These companies give the investors an annual ROI in the form of dividends. They are required by law to pay investors and shareholders +90% of their taxable income. In return, the state frees the firms from paying any other taxes!
This is pretty beneficial for firms and investors alike. That is because the investors will receive high ROI, and the companies will attract more capital to invest.
Risks and Returns of Real Estate Investment Trusts
Before we talk about risks and benefits, you should first know that there are two types of real estate investment trusts, and each one has its own pros and cons. Based on these pros and cons, you can do the math and decide which type (and which company within a type) to invest in. So let’s see more about that.
The first type is called Equity Real Estate Investment Trusts. Companies in this type own and operate real estate investments, and they have their tenants who pay rents. They mainly invest in things like malls, hospitals, hotels, residential buildings, and restaurants…
The second type is called Mortgage Real Estate Investment Trusts. These companies invest, as the name suggests, in loans and mortgages. They make a return when land or property owners pay interest on their debts.
So, the first question you should ask yourself when you want to invest is: would you rather invest in loans and mortgages or real estate assets. When you answer that question, go and check for some companies that operate in that sector and have a good reputation. Then, try to evaluate their growth and risk index based on their history and their owned assets.
Never rely only on the dividends yield they pay you. That is because a company can pay you a +10% dividend, for instance, but its stock is risky. So, if the stock drops, it will take your capital down with it. And vice-versa; a company may offer only a 3% dividend, but its stock is climbing faster, and so is your investment in it. Be cautious, but don’t hesitate!
What Are the Best Paying Jobs in Real Estate Investment Trusts (REITs)
REITs are simple companies that run by a simple system. This system offers different jobs for different profiles. Some of these jobs are very common such as HR and IT departments, while some others can be a little unfamiliar and only exist in REIT firms.
In this part, we will be focusing only on the best-paying jobs in real estate investment trusts. But don’t get this wrong! The purpose of this section is not to sort jobs based on salaries. Instead, it is to shed light on the best-paying jobs in REIT firms. So here is our list:
The acquisition team is responsible for finding investment opportunities. These opportunities can be traditional real estate assets or creative ideas that can become real businesses. Employees in the acquisition department are well-rounded individuals. They have solid experience in finance and real estate, and most of the time, they are backed by an elite college degree.
Acquisition team members are also great closers. What’s the point of hunting an opportunity if you can’t make a deal out of it? So, becoming a finance expert, a closer, and a hunter at the same time is a lot of hard work. And hardworking individuals get paid better than most people, don’t they?
This justifies why the acquisition is one of the best paying jobs in real estate investment trusts. Acquisition team members make no less than $60,000. More than that, they could be promoted to real estate associates. Want to know about the figures? Keep reading.
Many paths lead to becoming a real estate associate. One of which is the aforementioned role.
An associate is essentially a sales agent. He leads the negotiation process between a buyer and a property owner. He is also responsible for calculating the prices of properties and suggesting modifications to raise the prices. And on the other hand, he is responsible for finding potential customers and making them pay for the property.
Associates make money for their REITs firms when they convince property owners to sell for less than what buyers offer or when they convince buyers to pay more than what the sellers ask for. This again requires a merger of a lot of mental sharpness, instant financial problem-solving abilities, as well as efficiency in negotiation.
Associates make around $80,000. And they get tons of bonuses on closing deals which can take their salary up to +$100,000. And again, a great associate can be promoted to become an Asset Manager or a Property Manager.
Property managers look after properties and hold responsibility for all the operations that come with them. They are responsible for leasing, collecting the rent, and budgeting property maintenance. It may not seem like a complicated collection of tasks, but the challenge is to accomplish these tasks in a systematic and fast way and avoid any waste of time or money.
An average property manager salary is somewhere between $60,000 and $120,000, depending on the firm you work for. But on average, the role is one of the best paying jobs in real estate investment trusts.
Asset management is a sensitive job. An individual in this role is responsible for the governance and the realization of the values of properties that his firm owns or runs. Tasks of an asset manager include evaluation, maintenance, and development, in addition to the disposing of assets in the most cost-effective manner.
Asset managers work extra hours and do tons of homework. They absolutely work harder and bear more than what associates, for instance, can bear. And who bears more get paid more. That’s why managers make something around $200,000 a year.
One of the pros of this job -disregarding the generous salary- is its prospects. Well-rounded managers are likely to make great vice presidents or even start their own firms. Although the latter goal might be out of reach for the majority, many REIT firms were formed by ex-managers.
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Vice Presidents or VPs have tens of responsibilities. They oversee fund accounting and operations of REITs, analyze fund documents and signing them, mentor employees and spot talents, design and execute business models, and a lot more.
Vice presidents need at least 8 years of experience in related jobs such as management. A degree is a plus, but an undergraduate diploma is a must. Many VP’s become millionaires in less than ten years. Not thanks to their salaries only, but thanks to the coaching opportunities and public speaking events they get invited to.
An average VP salary starts around $160,000 and can go up to +$240,000, which makes it at the top of the best paying jobs in real estate investment trusts to ever exist.
The aforementioned figures are an estimation of average salaries based on online trusted resources. Many firms offer their employees greater salaries, and many offer less. If you are a new candidate for such a status, do not expect a very high salary. Bid on your skills and hard work instead of instant cash. Be Harvey Specter in your firm, and everyone will offer you their money.
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