Invest in Housing Without Buying a Home: 3 Stocks with High Yields and Growing Dividends (IRT, AVB, ELS)

With many Americans’ dream of homeownership fading, real estate investment trusts (REITs) emerge as a compelling opportunity. Residential REITs own, operate or finance income-generating real estate, such as single-family homes and apartment communities and allow individuals to invest without having direct ownership or management responsibilities. 

REITs must also distribute a large percentage of their taxable income to shareholders as dividends, often leading to high yields. 

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Let's look at three residential REITs you could invest in today to gain exposure to the real estate market.

Independence Realty Trust, Inc. IRT

Independence Realty Trust IRT owns and manages apartment communities across non-gateway markets in the United States. As of June 30, its portfolio comprised 110 communities containing 32,685 units.

According to company filings from September 2024, Independence Realty pays a quarterly dividend of $0.16 per share, resulting in an annualized dividend of $0.64 per share and giving its stock a 3.3% yield at the time of this writing.

Independence Realty reduced its dividend in 2020 due to the COVID-19 pandemic, but it has been growing its dividend in the years since as operations have normalized. It has raised its dividend each of the last two years and its 14.3% hike in June 2023 has it on pace for 2024 to mark the third consecutive year with an increase.

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AvalonBay Communities

AvalonBay Communities AVB is one of the largest owners and managers of apartment communities in the United States. As of June 30, it owned or had ownership interests in 300 communities containing approximately 91,399 apartment homes across 12 states and the District of Columbia.

According to company filings from September 2024, AvalonBay currently pays a quarterly dividend of $1.70 per share, resulting in an annualized dividend of $6.80 per share and giving its stock a 3% yield at the time of this writing.

AvalonBay has also been a consistent source of dividend growth. It has raised its dividend 11 times in the last 13 years, including two increases in the last two years.

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Equity Lifestyle Properties

Equity Lifestyle Properties Inc. ELS is a leading owner and manager of manufactured home communities, RV resorts, campgrounds and marinas. As of Oct. 21, it owned or had ownership interests in 452 properties containing 172,870 sites across 45 states and British Columbia.

According to company filings from July 2024, Equity Lifestyle pays a quarterly dividend of $0.4775 per share, resulting in an annualized dividend of $1.91 per share and giving its stock a 2.8% yield at the time of this writing.

Equity Lifestyle has an impressive track record of delivering dividend growth to its shareholders. It has raised its annual dividend payment for 19 consecutive years and its 6.7% hike in January puts it on track for 2024, the 20th consecutive year with an increase.

Better Yields Than Some REITs?

The current interest rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through publicly-traded REITs.

Arrived Homes, the Jeff Bezos-backed investment platform, has launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. It paid 8.1% in July. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

Looking for fractional real estate investment opportunities? The Benzinga Real Estate Screener features the latest offerings.

Wondering if your investments can get you to a $5,000,000 nest egg? Speak to a financial advisor today. SmartAsset’s free tool matches you up with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you.