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This Long-Term REIT Option Could Thrive amid the Coronavirus Crash
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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

  • This REIT Yields 7% and Is Completely Under the Radar
  • These 3 High-Yield REITs Pay 8%, 10%, and 12% Dividends
  • 3 "Cash-Machine" REITs to Buy Now and Hold Through 2020
  • This Week's Top REIT Pays an 8.2% Yield
  • Today's Top REIT Pays a 4.2% Dividend and Has 38% Upside
  • The Stakes Are High for This REIT Paying 30%
  • These 2 High-Income REITs Pay over 8%
  • The Top Marijuana REIT to Buy in 2020
  • This Undervalued REIT Pays over 5% and Will Explode Higher in 2020
  • These Two "Self-Storage" REITs Are Already Showing Signs of Breaking Out in 2020
  • This REIT Is Crushing the Market and Yields 11%
  • This Top REIT Will Soar Thanks to a Population Boom in These States
  • This Unloved REIT Has a “Strong Buy” Rating (and Pays a 10.6% Dividend)
  • One of the Best REITs to Buy in 2020
  • Buy This Top REIT Ahead of Its February Earnings
  • The 5 Top REITs to Buy in 2020
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This Long-Term REIT Option Could Thrive amid the Coronavirus Crash

By Garrett Baldwin, Executive Producer, Money Morning - March 18, 2020

Momentum in the market has been very negative.

And there has been virtually no buying pressure to match the forced selloff that we're seeing from liquidation of funds and larger institutions.

That said, we have reached the point where some prices have become simply too attractive to ignore...

This is especially evident in the real estate market, where certain assets are trading like the companies are going out of business.

Today, I want to discuss one real estate investment trust (REIT) that will thrive through this economic crisis and provide a big opportunity for investors in the months ahead.

Read more...

The Only REIT That Can Thrive Amid the Great Coronavirus Sell-Off of 2020

By Garrett Baldwin, Executive Producer, Money Morning - March 12, 2020

Things continue to go from bad to worse...

Even some of our favorite low-interest rate plays like real estate investment trusts (REITs) haven't been immune to the market panic.

Investors are taking remaining gains off the table and reallocating capital to cash reserves, bonds, and even gold.

But one REIT has remained immune to this selling pressure. That's because its unique position in the real estate market and the global economy is more critical than ever.

Read more...

This REIT Yields 7% and Is Completely Under the Radar

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

Today, I'm going to discuss one small-cap REIT that has risen sharply over the last 12 months but still remains under the radar on Wall Street.

It pays more than a 7% annual dividend that you can lock in today and ride through the balance of 2020...

Read more here...

These 3 High-Yield REITs Pay 8%, 10%, and 12% Dividends

By Garrett Baldwin, Executive Producer, Money Morning - February 23, 2020

The ongoing spread of the COVID-19 coronavirus has investors flocking to safety.

Gold prices hit a seven-year high Thursday, while U.S. Treasury yields plunged yet again.

The 10-year bond hovered at 1.53% - a pittance for investors who are looking out on a decade horizon.

The option of gold - which doesn't pay a yield - also isn't the most attractive option for anyone seeking income.

And things are only going to get more challenging for income-seeking investors in the months ahead...

3 "Cash-Machine" REITs to Buy Now and Hold Through 2020

By Kyle Anderson, Associate Editor, Money Morning • @KyleAndersonMM - February 20, 2020

Real Estate Investment Trusts (REITs) have always been one of my favorite types of investment.

Very few stocks offer the same share appreciation and dividend payments as REITs.

Take the Vanguard Real Estate ETF, for example. In 2019, VNQ popped more than 32%. It also paid shareholders a 3.58% yield.

Don't forget, that's for an ETF. Picking out the individual REITs poised to break out will yield even higher returns.

And in 2020, outperforming REITs have become even more important. Especially for income investors...

This Week's Top REIT Pays an 8.2% Yield

By Garrett Baldwin, Executive Producer, Money Morning - February 10, 2020

For investors looking to generate income, they aren't finding much help in the bond markets.

The U.S. 10-year bond is well under 2%, and further rates would reduce payouts.

Investors should consider assets like real estate investment trusts (REITs) that benefit from lower rates and can produce huge yields thanks to their favorable tax structure and stable cash flows.

The REIT I have for you today is paying an impressive 8.2% dividend yield. Try finding that type of yield anywhere else in the market...

Today's Top REIT Pays a 4.2% Dividend and Has 38% Upside

By Money Morning Staff Reports, Money Morning - February 4, 2020

Right now, economic jitters continue to rattle investor sentiment.

If you're looking for a safe dividend and a reliable place to generate income, consider the higher-end hospitality industry.

Companies that operate large convention spaces will continue to generate business as industry trade groups, and large organizations fill their hotels and meeting spaces for vital conferences and annual events.

Perhaps no one does it better and maintains a strong reputation than the operator that we're discussing today.

Read more...

The Stakes Are High for This REIT Paying 30%

By Jamie Dlugosch, Guest Writer, Money Morning - February 2, 2020

Normally, we wouldn't touch a REIT with such an insanely high yield.

Typically, a high yield like that is a major warning sign.

The stakes have never been higher in this all or nothing yield play.

But the timing is perfect.

Read more...

These 2 High-Income REITs Pay over 8%

By Garrett Baldwin, Executive Producer, Money Morning - January 29, 2020

With interest rates low, investors should seek income-generating assets that pay well beyond the 10-year bond and provide price appreciation upside in the process.

And the best possible assets to combine both attributes are real estate investment trusts (REITs).

You see, REITs allow you to cash in on a company's cash flow generated by properties across various sectors.

REITs provide one significant tax benefit that will enable investors to capture more of the cash flow.

And since these investment vehicles distribute at least 90% of its taxable income to shareholders, they are not subject to corporate taxation.

Today, I'm taking a look at two dividends that provide additional upside.

More importantly, they pay investors annual dividends greater than 8% and have reduced downside given their superior positions in their respective real estate sectors.

Read more...

The Top Marijuana REIT to Buy in 2020

By Money Morning Staff Reports, Money Morning - January 23, 2020

This year is setting up to be a big one for investors.

So, how do you tap into this "green wave" at the start of the year?

We recommend one of the safer investment plays that taps into the increasing real estate required to grow and manage cannabis...

This rock-solid REIT pays a 4.9% dividend and has potential upside of 50% in 2020 alone.

And when you combine the power of high yielding REITs with the upside of the cannabis industry, you have a rare opportunity that can make you a fortune...

This Undervalued REIT Pays over 5% and Will Explode Higher in 2020

By Jamie Dlugosch, Guest Writer, Money Morning - January 17, 2020

Stocks that pay large dividends while offering explosive growth will be the biggest winners in 2020.

Historically, the best place to find that combination of high-yield and growth has been real estate investment trusts (REITs).

Of course, the market figured that out and bid up prices of REITs significantly in 2019.

But today, I'm going to show you a REIT that has been completely overlooked by Wall Street...

These Two "Self-Storage" REITs Are Already Showing Signs of Breaking Out in 2020

By Garrett Baldwin, Executive Producer, Money Morning - January 15, 2020

The best way to get the benefits of strong yield and price upside is to invest in real estate investment trusts (REITs).

These alternative assets provide investors with cash-churning real estate properties that produce strong dividends and significant appreciation upside...

Typically, investors think of commercial real estate or retail centers when they think of REITs.

But there's one growing sector that is poised for big gains based on rising demand and demographic shifts across the United States.

I'm talking about the "self-storage" industry.

Nearly 20% of all self-storage properties fall under the ownership of the largest American self-storage REITs.

Here they are...

This REIT Is Crushing the Market and Yields 11%

By Jamie Dlugosch, Guest Writer, Money Morning - January 12, 2020

High-yield dividend stocks are about as attractive as it gets right now.

Many are yielding double or triple what historically low interest rates offer.

And when those stocks are attractively priced relative to expected earnings growth, the stock is an even better buy.

That's part of the reason why REITs have been the big winners over the past two years.

And the REIT I have for you today will be one of the biggest winners in 2020...

This Top REIT Will Soar Thanks to a Population Boom in These States

By Garrett Baldwin, Executive Producer, Money Morning - January 8, 2020

Idaho saw 67.4% of state-to-state customer relocations using United Van Lines as inbound migrations.

Given the proximity to California, Idaho has found itself as a desirable, less expensive destination with lower taxes and housing prices.

Investors looking to take advantage of the growing population might want to consider tapping into one real estate investment trust (REIT) that is tapping into other high-growth cities like Boise - the capital of the state.

I'm talking about other cities that saw similar swells of movers packing up and leaving high-tax states and turning to "secondary" markets with a more affordable lifestyle.

Let's dig into this opportunity - with a top REIT that has a 7% dividend and steep upside over the next 12 to 15 months.

Read more...

This Unloved REIT Has a “Strong Buy” Rating (and Pays a 10.6% Dividend)

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

The recent sell-off of prison real estate investment trusts (REITs) has pushed firms like the one I'll discuss today to an incredible discount and a hefty dividend that is hard to ignore (10.6%).

Today, I want to approach this subject by looking at the numbers. I’m not an advocate, and I’m not planning on owning this REIT in the future.

But I will make the case that this REIT is sharply undervalued due to a misplaced narrative driven by emotion over reason.

And you can decide for yourself if it’s worth buying or not…

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