Follow Dividend Stocks Alerts Start the conversation
Comment on This Story
Or to contact Money Morning Customer Service, click here.
The coronavirus has left 13.3% of people in the United States without jobs. Retail spending is down about 8% compared to pre-pandemic times. Earnings from big-name companies like Nike Inc. (NYSE: NKE) and Costco Corp. (NASDAQ: COST) have missed already-low expectations.
Yet, in the face of these stats, the stock market has been rising.
Since its March low, the Dow Jones and S&P 500 have risen about 37%. The Nasdaq is at an all-time high, up 45%.
The V-shaped bounce off of these lows has been completely unprecedented. But stocks aren't the only asset investors are flocking to...
Last Monday, pending home sales for May were released. Coming in at a whopping 44.3% spike, the number overtook the 15% expectation, making for the largest one-month jump in history.
In the face of low economic numbers, real estate, just like stocks, is surging. Realtor.com reports that over the course of 2020, inventory has declined by 15.7%, all while average listing prices rose 3.8% - both indications of a market in high demand.
But you don't have to buy property to invest and make money in the real estate sector.
Here's how to take advantage of the real estate boom... without touching an inch of land...
REITs Are the Key to Playing Real Estate's Surge
One of the best ways to invest in real estate is with a real estate investment trust, or a REIT. REITs are companies that own and sometimes operate income-producing real estate like malls, hotels, warehouses, and apartments.
And one of the most attractive features of REITs? They pay big dividends.
See, Congress created REITs in 1960 to make it easy for individual investors to own equity stakes in large-scale real estate companies. Among many favorable requirements, REITs must return a minimum of 90% of taxable income in shareholder dividends each year.
Check out the top dividend-producing residential REITs, as reported by Dividend.com:
Not surprisingly, residential mortgages are on the top of the list. Notice the extremely large dividend yields on each of these REITs.
Another great mortgage REIT not listed here is Broadmark Realty Capital Inc. (NYSE: BRMK). Recommended by Forbes, BRMK lends money to single and multifamily developers. Trading at $9.61, this REIT offers an 11.4% annual dividend.
There are also REITs that invest in and manage commercial real estate. The following three have some of the highest profit potential across the real estate space...
- Safehold Inc. (NYSE: SAFE): SAFE focuses on acquiring, owning, managing, and capitalizing ground leases and pays a dividend of 12.7% annually. It has just set an all-time high.
- Liberty Property Trust (NYSE: LPT): LPT invests in office buildings and industrial properties and has also just set an all-time high. Its current annual dividend yield is 8%.
- Prologis Inc. (NYSE: PLD): PLD invests in logistics facilities and also just set an all-time high. It pays a dividend of 7.9%.
Now, if you're looking for some diversification, consider purchasing the Real Estate Select Sector SPDR Fund (NYSEArca: XLRE). This exchange-traded fund (ETF) houses the best-performing REITs.
As you can see, REITs are a great way to invest in real estate. But they aren't the only way to do it...
You can also invest in real estate microcurrencies - and the profit potential there is huge, way outweighing REIT dividend yields.
Let me explain.
See, these microcurrencies are putting middlemen in real estate out of business. And middlemen are worth a ton of money in the industry...
Microcurrencies could save up to $30 billion in residential real estate escrows - making them an investment hotter than any I've seen before.
Learn how to secure your shot at 1,000% - click right here...
Follow Money Morning on Facebook and Twitter.
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.