Is Real Estate Investment Trusts A Good Career Path? 2021 Updates

The government implements special attention to developing the real estate market when the economy falls down. So, investors can look at it as a reliable source of income. And when the term income associated with anything, there is a question that arises with a career path, and that is “Is real estate investment trusts a good career path?”

If you are looking for the answer to this same question, it is important to get a detailed idea about it.

You also need to find the answers to,

  • How many jobs are available in real estate investment trusts?
  • What are the best paying jobs in real estate investment trusts?
  • How much is the real estate investor’s salary?

But first, get a detailed idea about REIT or real estate investment trusts. 

What Is REIT Or Real Estate Investment Trusts?

What Is REIT Or Real Estate Investment Trusts?

In order to find out the answer to the question “Is real estate investment trusts a good career path?” you first need to know the definition of real estate investment trusts or what REIT is. So, let’s step towards that.

REIT is an investment fund or security that is invested in those real estate properties that have the potential to generate pretty impressive income. That particular fund is owned and operated by a company of shareholders.  

To invest in some commercial properties, such as hospitals, shopping malls, warehouses, timberlands, hostels, office buildings, apartment buildings, and also student housing. For real estate investment trusts or REITs, special tax considerations are also available. So, the investors get to earn a higher return. In a stock exchange, it is also traded publicly. 

The Requirements For Real Estate Investment Trusts Or REIT

Just like mutual funds, both small and big investors can invest their money in real estate investment trusts for acquiring ownership. It has some rules and regulations for offering investment opportunities. 

Here are the requirements of Real Estate Investment Trusts or “REIT”

  1. A board of trustees or directors has to manage it.
  2. At least 90% of the total taxable income needs to be returned to the investors. 
  3. A minimum of 75% income must come from real estate investment.
  4. A minimum of 75% of its income must be invested in treasuries and real estate.
  5. Any real estate investment trusts or REIT must have at least 100 shareholders or investors. No investors or shareholders can own more than 50% of shares. 

Is Real Estate Investment Trusts A Good Career Path?

Is Real Estate Investment Trusts A Good Career Path

I know you want to know, “is real estate investment trust a good career path or not?” But in practicality whether a career path will be suitable for you or not depends on you. Not all career paths are for everyone. If one of your friends is earning huge profits from his or her REIT career, that does not mean it also will be equally profitable for you. So, rather than finding the only “yes” or “no” answer, it will be more effective if you get some idea about the positives and negatives of real estate investment trusts.

Positives Of Real Estate Investment Trusts

Here are the positive points of REIT or real estate investment trusts that will make you think you should make this your career path. 

  • Transparency

There are some rules that operate all the major stock exchanges, which are traded in REIT or real estate investment trusts. All other publicly listed securities also follow for regulatory and listed purposes. 

  • Liquidity

One can easily buy and sell the share of real estate investment trusts or REITs. So, it can be said that the liquidity of REIT is pretty much impressive. 

  • Diversification

Generally, real estate investment trusts or REITs have a very low association with other asset classes’ performance. So, in case other stocks or securities are going down, it will be beneficial to have an investment portfolio of REIT.

  • Performance

Due to the long-term appreciation of all commercial properties, real estate investment trusts or REITs has a history of being a well-performed sector.

  • Dividends

A profit portion of 90% or more than that is returned to the investors. So, it can be considered a stable source of income. 

Negatives Of Real Estate Investment Trusts

As we have got to know the benefits, now is the time to check on the negative sides of real estate investment trusts or REITs before you make the final decision for your career. 

  • Minimal Control

Investors have no control over operational decisions. They can not be part of the strategic decisions that are vital for the trading market and also the part of the ownership of the property. 

  • Investment Risks

Property evaluation, interest rates, debt, geography, and tax laws are some of the factors that affect the real estate market. So, you have to consider due diligence. 

  • Slow Growth

Apart from the 15% rules, most dividends are taxed as the same as regular income. 

  • Higher Tax Payments

As 90% of the returns are given to the investors and the rest 10% are reinvested back into the business, it experiences slower business growth

  • Management Fees

High administrative and transaction fees are charged by some real estate investment trusts. This minimizes the overall payouts of the investors. 

Is Real Estate Investment Trusts A Good Career Path?

Is Real Estate Investment

After knowing about REIT or real estate investment trusts, we can come to the conclusion that if you are ready to take risks and are able to engage your money for a longer-term, you can choose real estate investment trusts as your career. 

Frequently Asked Questions 

Q1. Are Real Estate Investment Trusts Worth It?

Real estate investment trusts are undoubtedly a better career plan. Several market experts consider REIT as a safe investment.  If you get superb dividends, with a greater cash flow, then it’s a great choice to invest. 

Q2. Can investing in REITs make you rich

Yes, you can earn millions and billions from real estate investment trusts if you are an experienced one and have much expertise. However, being a newbie, it’s not possible to make such an amount rather you can come across several risks and losses. That is why, if your aim is to be rich in a shorter time span, then Real estate investment trusts are definitely not for you    

Q3. How much should you invest in a REIT?

The minimum amount to invest in REIT varies from one real estate investment trusts to another. Typically the range is from $1000 to $25000. 

Q4. What are the disadvantages of REITs?

Although REIT is an exciting career to dive into, it is characterized by a plethora of disadvantages. For instance, slow growth, higher risk, more fees, returns out of control, etc. these are also potential barriers that you should judge. Before you invest one dollar, in real estate investment trusts, make sure you are placing each step carefully.

Final Words

As it has a good history and offers a stable income, it will be a good career option. But you also need to keep in mind that you have very little control over it and also need to bear some management fees that will reduce your income percentage. You may also want to explore some related careers and consider becoming a mortgage loan officer. Before making any confirmed decision, it will be best if you check the shortcoming of REIT as well.

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Tags: Real Estate Investment , Real Estate Investment Trusts , real estate investment trusts real estate investment trusts , real investment , REITS
Nisha

Nisha Jaiswal is a Traveler by passion and a Content Writer by profession. She is one of the Content Editors at BloggerOutreach, OnlineHealthMedia, ContentRally, TechNetDeals, etc. She loves to write articles on Fashion, Beauty, Health, Tech, and much more. She is also a freelance writer who writes SEO-friendly content.

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