With interest rates now as low as 1.75%, the robust dividend yields on real estate investment trusts (REITs) are looking very attractive to investors.
That's why we're bringing you the best REIT to buy for 2020.
Of course, low interest rates aren't the only things working in favor of the best REITs. Just look at the U.S. economy as we head into 2020.
The U.S. GDP grew 2.2% from $20.49 trillion in 2018 to $21.35 trillion in 2019. And another 2% growth is expected for 2020.
The November 2019 U.S. jobs report also soared above analyst expectations. Originally, it had forecast 187,000 for new jobs in November, but jobs actually grew by 266,000.
Beyond that, the unemployment rate fell to 3.5%, a half-century low, while wages were reportedly 3% higher than they were the previous year.
That's not just great news for the stock market, it's great news for real estate. With Americans doing as well as they ever have, they have more money to spend on homes.
For folks interested in the best REITs to buy, it's going to be even better.
The best REIT to invest in is in a hotly demanded sector that can help you add income to your portfolio in a low interest rate environment: multifamily housing.
In 2019, multifamily housing was a great performer thanks to soaring housing prices, with 8% growth to $336 billion, according to FreddieMac Multifamily.
Now, the kind of housing owned by multifamily REITs is in big demand. It provides both savings and simplicity. Hot demand has spurred a boom in the building of multifamily units as well.
And because the newly built supply is still too low to meet rising demands, apartment building prices are continuing to climb.
So, with high tenant demand and increasing real estate prices, there's strong consumer confidence within the sector. If you own an apartment REIT, you don't have to worry about the income you'll receive from dividends.
We see multifamily REITs and real estate booming well into 2020. In fact, at Money Morning, we're betting on the market for multifamily housing to push the best REITs for 2020 to greater heights.
Check out our Top REIT for 2020, below...
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This REIT is American Campus Communities Inc. (NYSE: ACC), and it specializes in a specific type of multifamily housing: student housing.
ACC is a market leader in the ownership and management of both on- and off-campus properties. On many campuses, new units are constantly being built and developed to replace older properties.
Since students are a captive audience, demand is nearly guaranteed. Of course, because of this, American Campus Communities benefits.
But the near-guaranteed demand of student housing isn't the only thing making ACC a great REIT to buy.
The 2020 U.S. presidential election currently includes debates over student loan debt. Several candidates are calling for forgiveness in regards to student loans.
Student loan debt is a massive constraint on students and their families. Plus, many students continue to live on or close to campuses after graduation. Less student loan debt means more disposable income for younger folks.
And if these debts are forgiven, landlords could hike up rent prices.
So, ACC's dividend yield could realistically advance beyond its current yield.
Of course, right now, we don't know the ultimate fate of student loan debt. But forgiveness is being talked about - and it has the potential to be a major catalyst over the next year.
Fortunately, even without student loan forgiveness, ACC is the best REIT to buy for 2020.
At its current share price of $46.62, ACC's dividend yield is a handsome 4.03%. That's more than double the yield on the 10-year Treasury right now.
More importantly, though, the dividend is very reliable given the steady and solid growth of earnings.
Analysts look for ACC's profits to rise 18% year over year.
So as we move into 2020, ACC shares will either rise nicely, or the dividend will climb even higher than its current level.
Of course, it's important to note that ACC sells at its early 2017 levels. In the past six months, the stock has lost roughly 2% of its value. Fortunately, that's good news for savvy investors. Its lower share price is an incredible buying opportunity for those that invest now.
It also certainly helps that its income statement is solid, and revenue is poised to grow 2.5% from $874.35 million to $896.41 million over the course of 2020. This makes it the best REIT to buy for 2020 and a top stock to own as well.
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