Diversify Your Portfolio Across These Three REITs For $1,000 In Passive Income

Real estate investment trusts (REITs) are attractive because they pay investors passive income in the form of dividends while giving them the advantage of a highly diversified portfolio. However, many REITs concentrate on a single real estate sector, meaning a sector-wide downturn could slash your dividends. You can minimize that risk by diversifying your REIT investment across multiple sectors. Here are three REITs you can buy to generate $1,000 in passive income.

Public Storage 

Public Storage PSA is one of America's recognized names in the self-storage game. They have also been a REIT since 1972. Public Storage's portfolio includes over 3,000 storage facilities around the country, encompassing more than 215 million cubic feet of space. In addition to monthly income from renters, Public Storage also generates ancillary revenue by selling moving supplies and insurance policies to their customers. 

Yahoo Finance estimates Public Storage's current market cap rate at just over $50 billion. Shares in public storage have been a favorite of analysts for much of the year, and Yahoo Finance's most recent analysis indicates that Wells Fargo and Raymond James both recently upgraded their forecast for Public Storage's performance. Current sales estimates for 2024 range from a low of $4.4 billion to a high of $4.8 billion. It's paying a healthy 4.18% dividend.

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Realty Income

The Realty Income Corporation O REIT specializes in leasing single-tenant properties to nationally recognized retailers. One of the major advantages of this format for Realty Income investors is that an overwhelming majority of its leases are long-term and have rent increases phased in throughout the contract. This combination of long leases and well-heeled tenants like Walmart and CVS Health offers investors a REIT with a reliable performance history.

That reliable performance history is increasingly important as some REITs have limited investor withdrawals or failed to make distributions due to industry troubles. Yahoo Finance reports that Realty Income has made 647 consecutive monthly distributions and increased investor dividends for the last 26 years. Realty Income has a market cap of $45.6 Billion and an equally impressive 6% dividend yield.

Equinix

Equinix EQIX is a REIT that provides interlinked data centers around the globe. They are one of the world's largest digital infrastructure providers and serve large organizations with long supply chains and a heavy dependence on data. As private and public sector entities grow, so does their necessity for Equinix's services. This explains why Equinix has become a leader in its field since its founding in 1998. 1982.

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The demand for Equinix's services is only expected to grow in the coming years, which means this REIT is well-positioned to deliver consistent passive income for its shareholders. Yahoo Finance estimates Equinix's market cap at $71 billion, bolstered by a solid 9.96 earnings per share. Equinix generated roughly $8 billion in revenue from its 10,000 customers in 2023. All this leaves Equinix shareholders a respectable 2.2% dividend yield.

How to Earn $1,000 or $10,000 in Passive Income from These REIT Shares

Investing in these three REITs would diversify your portfolio and put you in a position to earn solid dividends from each REIT if their current performance trends continue. Here's how you can buy shares in all three of them and earn $1,000 or $10,000 in annual passive income.

The formula for $1,000 in passive annual income is as follows. Start with $25,000 in capital and split it three ways. Buy $8,333 worth of Public Storage shares and the estimated 4.18% dividend would result in $348.31 in annual passive income. Buy $8,333 worth of Realty Income shares and the estimated 6% dividend yield would result in $499.98 in passive income. The remaining $8,333 invested in Equinix at 2.2% is $183.33 in passive income.

Together these three REITs would generate roughly $1,031 in passive annual income. If you were looking for $10,000 in passive income, you would need to scale your initial investment from $25,000 to $250,000. In either case, your investment would average a respectable 3.79% annual passive income yield. That's not a bad way to earn a solid return on a highly diversified investment.

Looking For Higher-Yield Opportunities?

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For instance, the Ascent Income Fund from EquityMultiple targets stable income from senior commercial real estate debt positions and has a historical distribution yield of 12.1% backed by real assets. With payment priority and flexible liquidity options, the Ascent Income Fund is a cornerstone investment vehicle for income-focused investors. First-time investors with EquityMultiple can now invest in the Ascent Income Fund with a reduced minimum of just $5,000.

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings. 

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