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This Top REIT Could Double in the Next 18 Months
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REITs

Best REITs to Buy Now

We always hear that stocks are the best way to grow your wealth over the long run. That sentence should be changed to say that stocks are ONE of the best ways to build your wealth. Owning the best REITs could be even better.

From Jan. 1, 1972, through the end of April, the S&P 500, with dividends reinvested, would have earned 10.825% annually. $100 would have grown to about $16,000.

Not too shabby.

According to data from the National Association of Real Estate Investment Trusts, that same $100 placed into REITs that owned commercial real estate would have returned 11.73% annually. That $100 would now be worth $23,726.

That's about $7,700 less shabby than owning stocks.

We think that most investors should own at least some REITs in their long-term portfolios.

And to help you find the right REITs to add, we've put together a list of the best REITs to buy now. Here are the top two – plus, stick around below for a complete primer on real estate investing…

The Best REIT for Industrial Properties

One of the best opportunities in real estate right now is in industrial REITs. These REITs own the warehouses and logistical centers that make commerce possible.

Plymouth Industrial REIT Inc. (NYSE: PLYM) owns 107 properties totaling 23.3 million square feet in industrial markets with access to large pools of skilled blue-collar workers in the main industrial, distribution, and logistics corridors of the United States.

They prefer secondary markets like Indianapolis/South Bend, Jacksonville, Atlanta/Savannah, Cleveland, Columbus, Cincinnati, and Memphis to the larger cities around the United States.

Plymouth is a 20% partner in a joint venture with Madison International Real Estate that plans to buy as much as $430 million in industrial properties around the country.

Plymouth will manage these properties for a 1% fee on total equity invested.

Plymouth has collected almost all of its rents throughout the pandemic and has a portfolio occupancy rate of over 95% right now.

Plymouth is on the hunt for more acquisitions with a focus on the Kansas City market. It made its first purchase there in February and likes the market's future. Kansas City is large distribution and logistical market that is perfect for Plymouth's portfolio.

Plymouth pays a dividend yield of 4.10% right now. We should continue to see substantial rent increases and a rise in property values fuel solid returns thanks to e-commerce and the rebuilding of the U.S. supply chain.

The Best REIT to Buy Now

If you are going to own real estate, why not own properties where your only tenant has never missed a rent payment – and never will? Easterly Government Properties Inc. (NYSE: DEA) rents to Class A commercial properties leased to U.S. government agencies that serve essential U.S. government functions. The rental agreements are made with the U.S. General Services Administration, so there is never a problem collecting rent.

Easterly will work with the agencies to find properties that fit its needs or develop properties that fit the needs of a given situation. The buildings are then leased on long-term leases of at least 10 years, usually with rent escalator clauses.

The REIT owns 79 properties 100% leased to the government, with over eight years remaining on the average lease.

The GSA now leases more properties than it owns, and that's not likely to change. Budget constraints weigh heavily in favor of long-term leasing rather than the purchase of buildings.

Easterly Government Properties ran up last year as it was considered to be the safest yield investment on the planet during the pandemic. As we approach the reopening of the economy, the shares have drifted back down near pre-pandemic levels and are once again an attractive buy.

Easterly Government Properties currently yields 4.10%, and the continual growth of government should provide all the lift these share need to give us very attractive total returns.

What Are Real Estate Investment Trusts (REITs)?

REITs (pronounced "reets") are publicly traded companies that own a portfolio of real estate holdings and properties. The company pools money from its investors to buy property and generates money from the real estate. When investors buy shares in the company, they own a piece of each property the company owns.

REITs are an easy way for investors to diversify their portfolio and gain exposure to the real estate market without directly purchasing individual properties. REIT companies must adhere to strict IRS rules, which include paying a minimum of 90% of their income to investors.

As a result of adhering to strict IRS rules, REIT companies enjoy a tax-exempt status which allows them to finance real estate at lower costs and to pass those savings on to investors.

Most REITs pay dividends quarterly, but some companies choose to pay dividends to their investors monthly.

Finding the best REITs to invest in is an excellent way to earn a passive income by playing the market. The top REIT stocks are subject to change due to market fluctuations but knowing the different types of REITs available and considering market trends can help you make the right investment.

What Kind of REITs Are There?

There are plenty of REIT options for the savvy investor to choose from. First, REITs can be divided into either mortgage or equity funds or a hybrid model:

  • Mortgage REITs (or mREITs) provide financing for real estate instead of owning actual properties. They earn income from mortgages or mortgage-backed securities that they originated or bought, and pass on that income to shareholders. When you buy a mortgage REIT, you buy shares similar to how you'd buy shares in a stock or ETF.
  • Equity REITs are real estate companies that own or manage properties that produce income, like apartments and office buildings. Equity REITs make money by leasing space to tenants, then they pass on that money (in the form of dividends) to shareholders.
  • Hybrid REITs are a combination of mortgage and equity REITs. Buying these lets investors diversify their holdings while mitigating risk.

Both mortgage and equity REITs can be further divided into the following categories:

Retail

A retail REIT owns and operates retail properties such as shopping centers, malls, grocery stores, and boutiques.

Office

Office REITs manage and own office buildings which are then leased to businesses and individuals.

Healthcare

Healthcare REITs involve the ownership of hospitals, medical offices, and/or senior and assisted living facilities.

Residential

A residential REIT owns and manages residential real estate such as apartment buildings, condominiums, and housing developments.

Are REITs a Good Investment?

REITs are a great way to collect passive income from real estate without the hassle of actual real estate investing. Investors can expect solid returns because REITs are required to share at least 90% of their taxable income to their investors every year.

Investing in an REIT is as simple as buying any other stock. Publicly traded REITs are available on stock exchanges and can be purchased through brokers or on trading platforms. Non-traded REITs can only be purchased by brokers who have access to the trusts.

The best REITs to invest in offer considerable gains to shareholders. REITs boast long-term performance similar to other value stocks and steady dividend yields, which have remained fairly consistent during market fluctuations.

REITs often outperform the S&P 500 Index and, because of their reliability, can serve as a way for investors to hedge their bets against other stock investments in the face of market volatility.

Nearly 145 million Americans have invested in REITs due to their benefits.

As a result of the strict rules to which REITs must adhere, companies are regularly monitored by auditors and analysts—providing a level of transparency that is hard to find in other sectors.

If REIT investing sounds right for you, Money Morning is ready to help. We can help you learn the ins and outs of REIT investing and help you find the best REITs to buy now.

Article Index

  • The 2 Best REITs to Buy Today Have Plenty of Upside Left This Year
  • The 2 Best REITs to Buy as Americans Flee Mega-Cities
  • Best High-Yield REITs to Buy Now Pay 14%
  • The 2 Best REITs to Buy Now (and One to Avoid)
  • 2 REITs to Buy Right Now and 1 to Sell
  • The 3 Best REITs to Buy Now Are Nearly Recession-Proof
  • 3 REITs to Buy as Soon as Possible
  • 3 Best High-Yield REITs to Buy in May 2020
  • 3 REITs to Avoid at All Costs Today
  • 2 Best REITs to Buy and Hold for the Long Haul
  • 3 REITs Poised to Soar in Today's Market
  • 3 Commercial Real Estate REITs to Avoid Right Now
  • This REIT Will Thrive During This Crisis
  • The 3 Best CBD Penny Stocks to Buy in the Coronavirus Crash
  • This Long-Term REIT Option Could Thrive amid the Coronavirus Crash
  • The Only REIT That Can Thrive Amid the Great Coronavirus Sell-Off of 2020
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This Top REIT Could Double in the Next 18 Months

By Garrett Baldwin, Executive Producer, Money Morning - July 14, 2020

Commercial real estate lenders have seen their stocks hammered so far this year.

REITs that lend for commercial real estate investing have also been hit very hard as the pandemic continues causing havoc across the country.

Even those CRE Lenders considered to be best in class Commercial Mortgage REITs have seen this stock fall by 40% or more since the pandemic began.

Increasingly it looks like we have a baby with the bathwater situation.

Many REITs, including commercial mortgage REITs, were heavily owned by exchange trade funds that mimicked various REIT indexes.

When panic-struck retail investors began running for their lives, everything got sold regardless of fundamentals, management skill, or loan portfolio quality.

But our top REIT is just flashed a strong signal indicating it's a buy now...

The 2 Best REITs to Buy Today Have Plenty of Upside Left This Year

By Garrett Baldwin, Executive Producer, Money Morning - July 7, 2020

Somebody forgot to tell the triple-net lease REITs that the world is ending.

Triple-net REITs own properties that are rented to single tenants.

The tenants are responsible for paying all the expenses associated with the property, including maintenance, taxes, and insurance (that's the "triple-net" part).

The leases tend to be long term with 10-15 years being standard.

The owners collect the rent and pass it on to us as shareholders.

Here are the best REITs to buy to add some much needed income to your portfolio this summer...

The 2 Best REITs to Buy as Americans Flee Mega-Cities

By Garrett Baldwin, Executive Producer, Money Morning - June 25, 2020

Investors love REITs for their high yields and stability.

But the coronavirus has made real estate a tricky investment.

Between shopping malls and retail outlets closing and people leaving cities - and high-end apartments and condos behind them - some REITs aren't what they once were.

Fortunately, there's an opportunity here too.

You can find REITs that offer the same income, stability, and upside you're accustomed to.

You just have to know here to look.

And that's where people are moving to.

Read more...

Best High-Yield REITs to Buy Now Pay 14%

By Garrett Baldwin, Executive Producer, Money Morning - June 17, 2020

The Dow Jones Industrial Average is up 7.8% for the month as we receive more encouraging progress on COVID-19 treatments.

The Federal Reserve has also been doing its part to shield the markets from crashing.

But that doesn't mean some segments of the real estate market haven't changed forever.

Today, we're going to show you what are still the best high-yield REITs to buy now-the ones that have kept their head above water.

Our top REIT has a yield of 14% right now...

The 2 Best REITs to Buy Now (and One to Avoid)

By Garrett Baldwin, Executive Producer, Money Morning - June 2, 2020

Real estate has taken a back seat for most investors.

But that's a mistake.

Sure, there are signs of trouble in some assets, but the best REITs are well positioned to make you money right now.

And they can be gobbled up with high yields you might never see again.

Today, we'll show you which REITs are worth buying right away.

But we'll also show you one that might not recover from the changes happening around us.

We've got you covered from all sides.

Read more...

2 REITs to Buy Right Now and 1 to Sell

By Garrett Baldwin, Executive Producer, Money Morning - May 26, 2020

REITs were long thought to be relatively safe investments for yield-seeking investors.

The COVID-19 pandemic has changed that assumption quickly and dramatically.

Owning the wrong REITs could be a costly mistake, which is why we'll show you which one to avoid on top of the best REITs to buy today.

Read more...

The 3 Best REITs to Buy Now Are Nearly Recession-Proof

By Garrett Baldwin, Executive Producer, Money Morning - May 19, 2020

We've heard a lot of doom and gloom around REITs since the pandemic shut down the economy.

Some of it is justified, of course.

But the storage real estate market is nearly recession proof.

Today, we'll show you the three best REITs to own there, all paying dividend yields over 5%.

Best of all, the indiscriminate selling has pushed these REITs back down to levels that are attractive buy points for long term investors.

Read More…

3 REITs to Buy as Soon as Possible

By Garrett Baldwin, Executive Producer, Money Morning - May 6, 2020

Between the pandemic, shutdowns, and the market volatility it all caused, investors have been pouring money into stable income producing investments like REITs.

But not all REITs are equal, so we'll show you the three REITs to buy today.

In fact, they should prosper and grow as the economy reopens in the month ahead.

Investors who use this opportunity to load up on these shares could be looking at massive gains over the next several years.

This includes some retail REITs that are being overlooked by the market right now.

Read more...

3 Best High-Yield REITs to Buy in May 2020

By Garrett Baldwin, Executive Producer, Money Morning - May 1, 2020

While the media has focused solely on the demise of commercial real estate during the COVID-19 crisis, some sectors will see a boost in the aftermath of the economic shutdown.

First, e-commerce will expand in the years ahead, which will keep the economy growing.

While it is indeed horrible news for mall owners, it is good news for the owners of warehouses and distribution centers that service e-commerce.

Industrial REITs own precisely that type of property and should survive the crisis and thrive for decades on the other side of it all.

Today, we're looking at the three best REITs to buy in this space for May.

Read more...

3 REITs to Avoid at All Costs Today

By Garrett Baldwin, Executive Producer, Money Morning - April 22, 2020

If you're looking to get a snapshot of what industries expect to thrive or collapse in the post-COVID-19 world, look no further than the real estate market.

Following the social distancing guidelines across the United States, numerous real estate investment trusts (REITs) have completely collapsed.

REITs that specialize in hotels, retail, and office space have plunged in value.

While some investors believe that we are looking at a potential rebound in the future, we urge caution.

Here are three REITs to absolutely avoid in April.

Read more...

2 Best REITs to Buy and Hold for the Long Haul

By Money Morning Staff Reports, Money Morning - April 14, 2020

The 2020 financial sell-off due to coronavirus is still in the early innings.

Although the markets have stormed back since hitting fresh lows in mid-March, we still face an extraordinary task for the economy.

However, data center REITs, healthcare REITs, and cell tower REITs have all made for solid investments in the long-term and provide a mix of appreciation upside and strong dividends.

Today, I want to talk about another classification of REIT that will do very well thanks to the backing of state governments and the federal government in the years ahead.

Their contracts are effectively guaranteed, making two companies - with dividends of 14.2% and 12.5% - an absolute steal at today's levels.

Read more...

3 REITs Poised to Soar in Today's Market

By Money Morning Reports, Money Morning - April 9, 2020

The coronavirus has pummeled certain corners of the economy.

In other corners, however, a robust recovery has already taken place.

Some industries have benefited from a swell of stimulus spending, Fed intervention, and robust asset purchases.

Nowhere has this been more evident than in the real estate market.

There is one more area of REITs for investors to be hyper-bullish on now.

Today, we're going to discuss a freight train of profits coming to one recession-proof industry and how you can cash in on this "must own" sector.

Read more...

3 Commercial Real Estate REITs to Avoid Right Now

By Money Morning Reports, Money Morning - April 6, 2020

Right now, commercial real estate is on the ropes.

Companies of all sizes are not paying rent.

Firms have moved toward a work-from-home policy.

And many retailers may never return to their locations even after coronavirus fades.

Barring a massive bailout of the commercial real estate industry, it's possible that some private equity firms and real estate companies could collapse too.

And these three commercial real estate REITs should be avoided at all costs...

This REIT Will Thrive During This Crisis

By Money Morning Staff Reports, Money Morning - March 31, 2020

Right now, concerns about the economy's structure continue to dominate headlines.

On Monday, the Federal Reserve announced that up to 47 million Americans could lose their jobs during the 2020 coronavirus crisis.

That would represent a staggering 32% of Americans out of work.

The shutdown of commerce is especially bad news for real estate investment trusts (REITs) that own hotels, shopping centers, and other points of social and recreational activity.

Some of the top performing assets of the last decade have seen their market capitalization's collapse.

But there is one class of REIT that is uniquely positioned to profit right now...

The 3 Best CBD Penny Stocks to Buy in the Coronavirus Crash

By Mike Stenger, Associate Editor, Money Morning - March 31, 2020

Right now, concerns about the economy's structure continue to dominate headlines.

On Monday, the Federal Reserve announced that up to 47 million Americans could lose their jobs during the 2020 coronavirus crisis.

That would represent a staggering 32% of Americans out of work.

The shutdown of commerce is especially bad news for real estate investment trusts (REITs) that own hotels, shopping centers, and other points of social and recreational activity.

Some of the top performing assets of the last decade have seen their market capitalization's collapse.

But there is one class of REIT that is uniquely positioned to profit right now...

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