As homeownership becomes elusive for many, investing in single-family real estate investment trusts (REITs) offers a viable avenue to access the real estate market.
Explore how this investment option provides exposure and potential returns in the shifting landscape of home ownership.
Invitation Homes
Invitation Homes INVH owns and manages a portfolio of approximately 80,000 single-family homes, making it one of the largest homeowners in the United States. About 96% of its portfolio is located in the Western U.S., Sunbelt, and Florida, and it's more affordable to lease a home than it is to buy in all 16 of its core markets in these regions.
Invitation Homes currently pays a quarterly dividend of $0.28 per share, which equates to $1.12 per share annually and gives it a yield of about 3.4% today. The company has also been a serial dividend-raiser, having raised its annual dividend every year since it went public in 2017.
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American Homes 4 Rent
American Homes 4 Rent AMH owns and manages a portfolio of over 58,000 single-family homes, positioning itself as one of the largest homeowners in the United States alongside Invitation Homes. Its portfolio spans 21 states in the Southeast, Midwest, Southwest, and Mountain Regions, encompassing markets like Orlando, Tampa, Dallas, Houston, Nashville, Denver, Phoenix, Salt Lake City, and Seattle.
American Homes 4 Rent currently pays a quarterly dividend of $0.22 per share, which equates to $0.88 per share annually and gives it a yield of about 2.5% today. The company has not raised its dividend for as many years as Invitation Homes, but its streak currently sits at three consecutive years, and its recent financial performance would support a continuation of this streak in 2024.
An Alternative Option: 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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