While investing in rental properties can offer significant returns, it's important to consider the complexities and risks involved.
From property management and maintenance to fluctuating rental income and potential vacancies, direct real estate investment demands time, effort, and expertise.
Real estate investment trusts (REITs) offer a more streamlined and efficient way to invest in real estate. By pooling funds from multiple investors, REITs can acquire and manage large portfolios of properties, including commercial residential and industrial real estate.
Don’t Miss:
- This Jeff Bezos-backed startup will allow you to become a landlord in just 10 minutes, and you only need $100.
- Your biggest returns may not come from the stock market. Invest the way colleges, pension funds, and the 1% do. For a limited time, earn a 1% return boost on your first EquityMultiple investment when you sign up here (Accredited Investors Only)*.
There are about 225 REITs listed on major exchanges, according to the National Association of REITs.
"REITs are companies that own, operate, or finance income-generating real estate properties," Rohan Reddy, head of international business development and corporate strategy at Global X ETFs, told U.S. News. "They are required to distribute at least 90% of their taxable income to shareholders, which makes them a popular choice for investors seeking regular income."
U.S. News recently recommended eight high-yield REITs to buy today.
Trending: Commercial real estate has historically outperformed the stock market, and this platform allows individuals to invest in commercial real estate with as little as $5,000 offering a 12% target yield with a bonus 1% return boost today!
Realty Income Corp. O
Realty Income is a standout among REITs, having earned a spot in the prestigious S&P 500 Dividend Aristocrats index, which recognizes companies for increasing dividends for 25 consecutive years. The company's current monthly dividend of 0.2635 per share translates to a 4.9% annualized yield.
Realty Income's tenant base is primarily composed of durable retail segments such as grocery stores, convenience stores, dollar stores, and pharmacies. These less cyclical businesses have enabled Realty Income to maintain high occupancy rates and consistently increase its dividend. It's achieved annualized dividend growth of 4.3%, outpacing inflation.
See Also: If there was a new fund backed by Jeff Bezos offering a 7-9% target yield with monthly dividends would you invest in it?
National Storage Affiliates NSA
National Storage Affiliates is a compelling REIT to consider, currently yielding 5.1%. Unlike most REITs, which are susceptible to economic downturns, self-storage REITS like National Storage often exhibit countercyclical behavior.
Annaly Capital Management Inc. NLY
Annaly Capital Management is a prominent mortgage real estate investment trust (mREIT) managing a portfolio valued at about $82 billion, primarily invested in mortgage-backed securities.
Annaly's strategy involves a classic yield spread approach — borrowing funds at short-term interest rates and investing them in long-term securities, typically offering higher yields. The firm's success hinges on its ability to efficiently leverage this spread, enabling it to generate a high yield of 13.2%.
AGNC Investment Corp. AGNC
AGNC Investment Corp. is an mREIT specializing in residential mortgage-backed securities guaranteed by U.S. government agencies like Fannie Mae, Freddie Mac, and Ginnie Mae. The government backing significantly reduces the credit risk associated with the underlying loans, providing a layer of security for investors.
W.P. Carey Inc. WPC
W.P. Carey focuses on sale-leaseback transactions. In a sale-leaseback, a company sells its real estate to an investor like W.P. Carey and then leases it back under a long-term agreement. The strategy allows businesses to unlock the value of their real estate assets and convert them into liquid capital while still retaining the use of the property. W.P. Carey currently offers a 5.9% yield to investors.
Omega Healthcare Investors Inc. OHI
Omega Healthcare Investors is a leading healthcare REIT with a network of 900 properties across the U.S. and U.K. managed by 77 operators and offering over 86,000 beds. The company’s diverse portfolio, encompassing skilled nursing, assisted living, independent living, rehabilitation, and acute care facilities, positions it well to capitalize on the growing demand for senior care services driven by an aging population. Investors can expect a 6.4% dividend yield.
Trending: These five entrepreneurs are worth $223 billion – they all believe in one platform that offers a 7-9% target yield with monthly dividends
Sabra Health Care REIT Inc. SBRA
Sabra Health Care REIT, which yields 6.3%, hasn't suffered from shaky financials like some other long-term-care REITs. The company maintains a strong financial position with favorable net-debt-to-adjusted EBITDA and interest coverage ratios compared to its peers. It also boasts significant liquidity, holding about $900 million in cash and having access to an additional $455 million through its at-the-market equity offering program.
Apple Hospitality REIT Inc. APLE
For those seeking direct exposure to hotel properties, Apple Hospitality REIT is a compelling option. The REIT owns a diverse portfolio of hotels branded by Marriott, Hilton, and Hyatt. Apple Hospitality investors benefit from the stable income generated by these properties as well as the potential for long-term growth. The REIT currently offers a 6.4% dividend yield and monthly dividend payments.
A 9% Return In Just 3 Months
EquityMultiple's ‘Alpine Note — Basecamp Series' is turning heads and opening wallets. This short-term note investment offers investors a 9% rate of return (APY) with just a 3 month term and $5K minimum. The Basecamp rate is at a significant spread to t-bills. This healthy rate of return won't last long. With the Fed poised to cut interest rates in the near future, now could be the time to lock in a favorable rate of return with a flexible, relatively liquid investment option.
What's more, Alpine Note — Basecamp can be rolled into another Alpine Note for compounding returns, or into another of EquityMultiple's rigorously vetted real estate investments, which also carry a minimum investment of just $5K. Basecamp is exclusively open to new investors on the EquityMultiple platform.
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.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.