The Best Real Estate Stocks to Invest In For 2021

Now that the economy is slowly getting back on its feet, there could be some really lucrative opportunities in real estate investing.

One of the best ways to invest and see your income grow is by going for REITs or Real Estate Investment trusts. These are publicly traded real estate companies that you can find on the public exchange. 

Having some decent REITs under your belt is a great way to get passive income from real estate. It will also help to diversify that investment portfolio, whether you’re going for manufactured homes Michigan or commercial real estate.

When you invest in REITs across various sectors and industries, the return on real estate stocks can be very appealing in the long term.  There would be capital preservation and appreciation as well, which are two of the key aspects of sound investing.

With the pandemic creating havoc in the economy, the average REIT was underperforming as compared to the rest of the market. Real estate investing might not have been the best policy for some time, but we might find some excellent entry point investments for certain stocks now. Here are some of the best options for real estate stocks right now: 

Real Estate Stocks to Invest In

Below are the best REITs to put your money on even in these uncertain times: 

Digital Realty Trust DLR

The Digital Realty Trust organization developed data centers and opted for them alongside other businesses. The focus here is on several industry segments, including financial services, digital media, cloud software, artificial intelligence, etc. Their dividend yield as of March 2021 is around 3.37 percent, with the prices of each being $131. 

The data centers in Digital Realty Trust are meant to assist international and domestic tenants. Today, this is an asset that’s still competitive in the world of real estate investing. In short, real estate that can support digital infrastructure is still not widely available. Since this company produces something that’s in demand, it’s likely to grow on a global level in the near future. 

The past four quarters have seen Digital Realty Trust gain positive revenues even with the economy in a troubling state. 

Some experts are also of the opinion that Digital Realty Trust is a giant in the making. The bookings are high across its product range, while the management is positive about how to handle demand plus growth. 

Even when the pandemic was spreading, the data centers at Digital Realty Trust were operating without major descriptions in business. The 2020 earnings release in the fourth quarter reported an upward movement in the quarterly cash dividend, along with high values for rental revenues and renewal leases.

Why we should consider investing

Overall, this company has increased its dividend for 16 years running. This gives us an idea of how strong the real estate business is and how it can expand on an international level. The positive factors mean that the stock can gain market value very rapidly over the next few years.

Simon Property Group SPG

The dividend yield for Simon Property Group in early 2021 was around 4.56 percent, with the price being around $112. SPG is an REIT which owns, manages, and develops commercial real estate properties for dining, shopping, entertainment, and mixed use. 

The properties within these groups include shopping centers, outlets, and malls located in Europe, Asia, and the United States. 

While SPG did see its share of lows in March 2020, its recovery has been fairly steady. There is also a lot of room for its growth within the real estate market. While the stocks might be volatile, this is one REIT that gives you a strong cash flow and liquidity as well. 

In the final fourth-quarter earnings report for 2020, SPG had about $1.5 billion cash in hand and over $8 billion liquidity. Their balance sheet is stable, with over $34 billion in assets at the end of December 2020. This number exceeds its liabilities, which are around $31 billion in total. 

Why we should consider investing

When it comes to betting in real estate stocks, a good management team, true leadership, and a positive vision are just basic requirements. The CEO of SPG (David Simon) has shown a lot of creativity in the company’s history. Simon has also been an important figure in the RIET era since 1993, so any REITS under him are probably going to be a sound choice for investing in real estate stocks. 

Public Storage PSA

As of March 2021, the company known as Public Storage has a dividend yield of 3.34 percent, with the price being around $235. PSA is a type of REIT that has self-storage facilities, leasing their real estate for both business and personal use. 

The financial statements of this company states that it has ownership or equity interest in over 2,500 storage facilities scattered across 30 American states. It also holds an international presence through acquiring Shurgard Self Storage SA. This means that it also holds self-storage units in Europe. Needless to say, anyone who invests with this company is almost sure of enhancing their income. 

Why we should consider investing

One should note that the price to earnings ratio here is around 38. This is quite a bit below the industry average, which is 66. The dividend yield is around 3.45 percent, above the 2.5 percent market median. Keeping this company’s stable position and strong return in mind, it does seem to be a relatively lower risk for real estate investing. Those who are especially interested in commercial real estate might consider investing here and increasing their passive income. 

American Tower Corp. AMT

The dividend yield for this REIT is around 2.26 percent, while the price is around $210. It just might be among the best options for real estate stocks, so do take a look here if you’re investing in real estate. Those who are intrigued by 5G technology investments will probably find what they’re looking for with AMT instead of other REITs. 

Overall, this is one of the REITs with a large global real estate presence. It also operates and develops communications real estate and gets revenue from leading cell tower properties. In December 2020, AMT held around 181,000 communication sites in their real estate portfolio. 

Why we should consider investing

With 5G being the most recent technology in communications and data usage increasing all over the world, these real estate stocks will likely become very lucrative. It could become an excellent ‘buy and hold’ earning passive income for those who can invest in its stocks now. Just a few of AMT’s customers include huge names such as T-Mobile US, AT&T, and Verizon. 

STAG Industrial STAG

When one is thinking about investing in real estate or buying real estate stocks, they must consider industrial real estate with STAG Industrial. It has a dividend yield of about 4.5 percent, with the price being $32 or thereabouts. 

This company says that it’s perhaps the only ‘pure-play’ option when it comes to industrial REITs. Overall, the United States industrial market is valued at over $1 trillion. For now, STAG holds around 0.5 percent of this market. While it might be a longer shot for investing in real estate stocks, it does show that there’s a lot of growth potential for such REITs. 

The unique position of STAG in the market for real estate stock means that we have a balance of income along with expected growth. STAG also focuses on single-tenant industrial properties. This sector is especially trending these days, especially when compared with net lease REITs, which also include office and retail. 

Why we should consider investing

STAG Industrial is the owner of over 400 properties across 30 plus states. At the end of 2020, STAG had acquired around 32 more buildings. 3.8 percent of its business is with its most major customer, Amazon.com. Other familiar names in STAG’s customer list include FedEx Corp, Eastern Metal Supply, and XPO Logistics. This shows us that it’s one of those REITs that even the big names can trust. 

Real estate investors who are looking for a valuable REIT will probably find STAG to be a viable option. Its stock price is lower than the other REOTS we’ve talked about so far. Moreover, this REIT comes with a tempting dividend yield if you’re interested in increasing your income through investing in real estate. 

The Takeaway

Getting both value and growth in your real estate stocks isn’t a piece of cake. However, finding the right kind of real estate stocks will help you along the way. At the end of the day, investing in real estate isn’t only about buying up properties. With all the REITs discussed above and many more lucrative options as well, it seems like real estate stocks are a relatively safer way to go. 

Of course, we can’t say that the perfect real estate stocks exist or are even a thing. To determine your best choice for investing in real estate, use the information available and trust your instinct along with asking more experienced investors.  Look around, read up a bit more, and then take the plunge with the most promising REIT you can afford.