The past few years have felt like an adrenaline-filled ride for most REIT investors. After a year of double-digit returns in 2019, the shocking COVID crash eradicated nearly four years of gains in a heartbeat. However, like a phoenix rising, the resilient real estate market scaled fresh peaks in 2021, recording its most robust year since 1976. Yet, 2022 ushered in an unexpected whirlwind of volatility, with the Vanguard Real Estate ETF (VNQ) posting a -20% return since the year's inception.
Amidst these stormy waters, one largely unknown REIT has emerged as a beacon. The Roots Investment Community Fund has defied the odds, accumulating a dazzling 36% total return since July 2021 while simultaneously strengthening the communities it invests in.
Click here to buy shares through the Roots investment platform
What's the secret to Roots' phenomenal performance?
At the heart of Roots' success lies a unique, innovative business model. Roots handpicks single-family properties for renovation, rental and management, a traditional strategy followed by real estate moguls globally. But here's the twist - Roots empowers its tenants with a piece of the action. Consistent rent payments and property upkeep reap quarterly rebates that tenants can reinvest into the fund.
This ingenious strategy minimizes tenant turnover, maintaining high occupancy rates, and significantly boosting the company's bottom line. As a result, investor returns skyrocket.
Additionally, the REIT's performance remains insulated from the fickle whims of the stock market. As a non-traded REIT, Roots' share price aligns directly with its net asset value (NAV), effectively sidestepping the market's impulsive reactions to each piece of breaking news.
Investors can purchase shares directly from the Roots investment platform with a modest minimum investment of $100. The REIT is constructed for long-haul growth, but it also offers liquidity each quarter through the Unit Redemption Program. This feature allows investors to harvest the full value of their shares when selling. Complete details of the redemption program can be accessed via the offering circular through the Roots website.
Moreover, Roots hasn't just broken growth records - it also serves up an enticing dividend yield. With a recent 25% increase in payout, the forward yield now stands at an attractive 6.45%.
If Roots has managed to perform so well through this period of high inflation and interest rate hikes, imagine what it will do as the economy stabilizes and the real estate market continues its path of strong growth.
Click here to access the Roots investment dashboard to start buying shares with as little as $100.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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