Is Real Estate Investment Trusts a Good Career Path in 2024 – Latest Updates
Well, you need to weigh the pros and cons of REITs before determining whether it’s a good career path in 2023. There are a number of great real estate options that you can choose as a profession. It’s time to figure out: is real estate investment trusts a good career path for this year?
Along with that, you will know about various types of REITs available in the real estate market. Also, you will learn to consider different factors before investing in any REITs. So, if you are looking for investment opportunities in the real estate market, continue reading.
Is Real Estate Investment Trusts a Good Career Path?
Well, you need to weigh the pros and cons of REITs before determining whether it’s a good career path in 2021. Now, let’s figure out: is real estate investment trusts a good career path for this year?
Pros and Cons of REITs
The following table will help you weigh the pros and cons of real estate investment trusts and whether it’s profitable to invest in them.
| Pros of REITs | Cons of REITs |
|---|---|
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The above information has provided you with the potential advantages and drawbacks of investing in REITs. Now, it’s your turn to decide whether you want to invest in them or not. What do you think, ‘Is real estate investment trusts a good career path?’ If yes, you can invest in the following types of REITs.
Types of REITs
Although REITs can be divided into several types, these are some of the main categories of real estate properties that can yield good profits.
1. Residential REITs
This type of REITs includes various kinds of residential properties like family rental properties, PGs for students and job holders, and other residential properties. While investing in this type of REITs, you need to consider the following factors:
- Consider the population of the state or city.
- What are the job opportunities and unemployment rate?
- What is the vacancy rate of residential properties?
- Consider the economic growth of the state or country.
Although these are some of the common factors that you should consider before investing in residential REITs, you should do more research before investing in them.
2. Retail REITs
Almost all the retail buildings in the United States are owned by retail REITs. According to a recent report, more than 24% of the total REIT investments are from retail. So, it’s a great percentage of the entire real estate investment trust.
Before you invest in retail REITs, you should first consider the performance of the retail industry. If you find that the retail industry is performing well, you can then decide whether it will be profitable to invest in retail REITs.
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3. Office REITs
As the name suggests, these are investments in office buildings. Office REITs get returns from the rental income from the long-term lease agreements from business organizations. If you are interested in office REITs, keep the following in mind:
- What is the employment rate and the economy of the state?
- Consider the vacancy rate.
- How is the economy of the area where the particular office REIT invests in?
- How much capital of the REIT to acquire office buildings?
However, these are some essential factors; you should do proper research before putting your money into office REITs.
4. Healthcare REITs
Healthcare REITs are also a great choice because the healthcare cost in the United States is rising every year. This type of real estate investment trusts include hospitals, medical centers, retirement homes, nursing homes, etc.
So, the healthcare REITs are directly involved in the growth of the healthcare system. Some of the crucial factors to consider before investing in healthcare REITs are the demand for healthcare services, the aging population, etc.
5. Mortgage REITs
Among all the REITs, mortgage REITs are considered to be less risky. More than 10% of REITs investments are invested in mortgages, and you should consider this as a good investment for diversifying your portfolio.
However, you shouldn’t randomly choose mortgage REITs, and low risky actually doesn’t mean you will not lose your money. You should consider the interest rate and net asset value. So, you should do proper research and compare different mortgage REITS before investing in them.
How to Assess REITs
Now that you have understood different types of REITs, their advantages, and disadvantages, you must have got some clarity on the question; ‘is real estate investment trusts a good career path in 2021?’ However, if you are still unsure, here are some factors that will help you assess a REIT properly.
- Choose from different REITs that have a good historical track record of high-dividend and long-term capital appreciation.
- Choose REITs with better liquidity.
- Calculate the FFO (funds from operations) instead of the payout ratio to choose a REIT.
- One of the best ways is to invest in a mutual fund or ETF that invests in REITs.
Final Words
Investing in real estate was never so simple that it is today. I hope you get a clear answer to the most asked question; ‘is real estate investment trusts a good career path?’ Even if you have never invested in REITs, it’s not too late. You can still gain significant profits by choosing the right REIT stocks for your investment. Like any other investments, real estate investment trusts.
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