The U.S. real estate market is more unaffordable than ever, pushing more people to rent rather than buy. Residential REITs offer investors the benefits of owning rental properties without the hassles of purchasing a property or being a landlord.
Here are two REITs that offer investors exposure to single-family homes.
Invitation Homes
Invitation Homes INVH has a portfolio of approximately 80,000 single-family homes for lease across 16 markets focused on the Western United States, the Southeast, Texas, and Florida.
Invitation Homes currently pays a quarterly dividend of $0.28 per share, equating to $1.12 per share annually, giving it a yield of approximately 3.3% at the time of this writing. It has also raised its annual dividend every year since its initial public offering in 2017, making it a quality dividend-growth play.
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American Homes 4 Rent
American Homes 4 Rent AMH has a portfolio of approximately 59,000 single-family homes in the Southeast, Midwest, Southwest and Mountain West regions of the U.S.
American Homes 4 Rent currently pays a quarterly dividend of $0.22 per share, equating to $0.88 per share annually, giving it a yield of about 2.5% today. While its yield isn't as flashy as Invitation Homes', American Homes has raised its annual dividend each of the last three years, and its recent financial performance could keep this streak alive in 2024.
Arrived Homes
Arrived Homes also offers a way for investors to gain exposure to residential real estate. It's an alternative investment platform, backed by Jeff Bezos and Dara Khosrowshahi, that allows individuals to easily invest in real estate by purchasing shares of rental properties. Investors on the platform earn passive income through the rental revenue while waiting for the properties they invest in to appreciate in value over time.
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