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…
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.
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.
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.
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:
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.
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.
With interest rates likely to remain low for the foreseeable future, savvy investors are looking for alternative income sources.
That’s where one of the best REITs to buy in 2020 comes into play.
This pick for one of the top REITs to buy now pays a 5% yield and has a potential 50% upside over the next 12 months.
Right now, the market has mispriced one of the top REITs to buy.
This company is poised to report earnings in February, and smart investors should scoop up the stock before earnings and before it pays its next dividend.
Not only will you benefit from the distinct tax advantages offered by this REIT, the probability that its stock price will appreciate throughout 2020 is high according to our proprietary Money Morning Stock VQScore™ system.
REITs (or real estate investment trusts) are the gift that keep on giving.
In a world of historically low interest rates, high-dividend REITs have been extremely popular.
Last year, REITs soared along with the rest of the market. And they also offered much higher dividend yields than other asset classes.
It's impossible to predict what the markets will do in 2020, but collecting solid dividend payments will continue to be a winning strategy.
And these five dividend payers are your best bet...
With interest rates now as low as 1.75% and likely to remain in that range for the foreseeable future, the robust dividend yields on real estate investment trusts (REITs) are looking very attractive.
That’s why, today, we’re bringing you the best REIT to buy for 2020.
If you're like me, you like to purchase things when they are on sale.
You'll load up on hamburger meat and freeze some when you can buy two pounds for the price of one...
You search for bargains online during the holiday season because one website sells the product you want for less...
Or you wait around for something you really want to buy - that no one else is purchasing - and watch the price drop and drop until you get it on the cheap.
That same pattern holds for stocks.
There's no doubt that 2019 was the year of the REIT.
Three Federal Reserve rate cuts have left interest rates incredibly low, between 1.5% and 1.75% as we head toward 2020.
Any REIT with stable cash flow was bought and bought hard in 2019.
That's left many REITs overpriced as we head into 2020.
Twenty nineteen was a great year for stocks.
Nearly all sectors and types of equities, including REIT's soared in the last 12 months.
But that's thanks the Fed's low interest rate regime.
Not only have income investors been left out in the cold, but the stock market's surge could sputter in 2020.
That's why I want REITs in my portfolio right now...
REITs offer two benefits to income-seeking investors - stock appreciation and yield income.
If you pick the right REIT, the stock's share price could outperform the broader market and net you incredible gains.
REITs with high yields will pay steady income for you to bank or reinvest.
That income can often double or even triple the bond market's rate at any given moment.
You don't want to miss out on the dividend yield of this REIT that is about to skyrocket.
Today, I’m going to unpack the top REIT tapping into one of the biggest demographic and economic trends in the U.S. economy.
You see, the ongoing boom for medical housing and the rising demand for real estate from the medical and life science industries has one healthcare REIT set up for mouthwatering returns...
It pays a 4.4% dividend and could easily see its unit price increase by 51% over the next year...
It's highly unlikely interest rates move higher anytime soon.
That continues to mean REITs are the best game in town for those looking to add income to their portfolio.
What type of REIT will do best in the current environment?
My bet is on multifamily housing. Here's our top REIT to buy before 2020.
If you're living on a fixed income - a 10-year bond rate under 2% isn't going to do much for your money, given the rate of inflation sits at 1.8% in the United States.
Instead, you should look at real estate investment trusts (REITs).
These alternative vehicles produce gobs of cash thanks to their rental activities, higher appreciation upside due to increasing real estate demand, and favorable tax benefits to their unitholders.
Today, I'm going to uncover a REIT that pays a 5% dividend yield and could quickly surge 60% in value by this time next year.
Real estate investment trusts, also known as REITs, offer both quarterly payouts and stock price appreciation potential.
In fact, we've got a REIT for you today that delivers both of those things
I dare you to try to find a better "Black Friday" bargain this year.
Go ahead, stand in line all night waiting to save $25 on that new television set.
If you're looking for a bargain, I've found what very well could be the deal of the century.
REITs offer two benefits to income-seeking investors - stock appreciation and yield income.
If you pick the right investment, the stock's share price could outperform the broader market and net you substantial gains.
And REITs with robust yield will pay steady income for you to reinvest or put into the bank.
That income can often double or even triple the bond market's rate at any given time.
You don't want to miss out on the best REITs to buy.
According to the Milken Institute, the average per-capita spend on healthcare by Americans over 85 is $32,900 per year. For comparison, the average American only spends $13,700.
Meanwhile, housing for this demographic remains in short supply.
A new NIC study shows that existing supply of 80-plus housing sits at 1.592 million units. By 2040, the U.S. needs to see the number of units increase by 986,000 in order to meet expected demand. By 2030 alone, America needs to add 881,000 new units.
With healthcare spending on the rise and demand for facilities expanding, this industry looks recession proof heading into the next decade.
