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.
Huge dividends and appreciation from simple supply/demand factors make REITs extremely attractive today.
With the underlying construct of the market and economy unlikely to change in the near future, REITs offer a safe haven likely to last for the next few years.
And the timing is perfect…
Two new REITs have just received our highest Money Morning Stock VQScore ratings.
Interested in investing in REITs but unsure of where to start?
Our financial experts at Money Morning lay out every detail you need to know to become an expert at REIT investing!
We’ll lay out every detail you need to know to become an expert at REIT investing!
If you're serious about making money, you need to own stocks and other assets tied to real estate.
Unfortunately, too many investors don't have the capital to own a significant amount of property. Or they aren't able to meet the financial thresholds required to invest in private equity firms. In some cases, the minimum to invest can be in the hundreds of thousands - if not millions of dollars - well outside the reach of ordinary people.
But savvy investors can still tap into a diversified basket of real estate investments for less than $20. These assets capture upside of real estate while also producing cash flows in the form of dividends.
They're called real estate investment trusts, or REITs. And if you find the right REIT, it can make you very wealthy in a short period.
And the top mortgage REIT we found for you today is paying a massive 9.8% dividend...
The retail sector is struggling, but you can still profit from the industry.
The top retail REITs could be your ticket. In fact, we have one top REIT to buy today that pays a 9.1% yield.
Over the long haul, one of the best places to put your investing capital is real estate investment trusts or REITs.
The best REITs offer both high-yield dividends and the potential for significant returns.
And REITs look even better when interest rates are low, like they should be for the foreseeable future.
That's why I settled on the following REIT as the best to invest in today...
With interest rates falling, income-hungry investors are turning to high-dividend stocks or paying a heavy price for bonds with declining yields.
However, investors seeking the combination of both income and price appreciation upside should turn to real estate investment trusts (REITs).
REITs remain largely misunderstood. These "alternative" investments target the real estate industry.
But you're not just investing in a single plot, townhome, or apartment complex. It's diversified across a range of sectors. And sometimes, one of those sectors thrives enough to boost the value of the REIT significantly.
But how do we identify the best REITs to own?
Our secret weapon is the proprietary Money Morning Stock VQScore™ system...
Even while the retail sector is struggling, the best retail REITs can help you profit.
In fact, we have one of the best high-yield REITs to show you today. And it pays over 9%.
High-yield REITs have been in high demand all year.
But picking any REIT based on yield alone is not a winning strategy.
Not all REITs are created equally.
In fact, there are certain REITs investors should be avoiding entirely.
And these three top the list...
The market has been a wildly volatile roller coaster for the last year.
But the top REIT to buy now is thriving in the market's turbulence.
Real estate has been one of the top-performing assets of the last 20 years.
It's a cornerstone investment of the world's wealthiest people. It's a safe asset that brings inflation protection, appreciation upside, and in many cases - outstanding cash flow.
Unfortunately, retail investors can't access top-performing real estate assets that are reserved for accredited investors.
One secret that too many retail investors fail to see is the tremendous opportunity in Real Estate Investments Trusts (REITs).
Today, we're going to show you how to identify the best REIT out of the 1,100 registered options across the United States.
Why did it take so long for Sears, one of the kings of retail, to fail?
Actually, it hasn't failed. Sears stock may be worthless, but the stores are still around.
That's because they're evolving. If the department stores survives, it will be thanks to the effort of employees implementing changes fit for the current competition.
This type of evolution at Sears and other retailers has me absolutely giddy about owning the top REIT I'll show you today.
In today's market the items in most demand are Real Estate Investment Trusts or REITs.
Especially those top REITs that pay huge dividends and have significant upside.
But investors shouldn't simply buy any REIT just for the sake of buying a REIT.
Not all REITs are created equally. Some are better than others.
My suggestion is to focus on supply and demand when making your buying decisions.
REITs in an underlying industry experiencing inflationary conditions are the ones to target aggressively.
Here's our top REIT that fits that description perfectly...
Around the globe, interest rates are falling.
The European Central Bank just cut rates once again and introduced new stimulus measures.
Also, roughly $17 trillion in global debt now produces negative yields for investors.
The downtick in global rates has spurred increasing demand for non-interest producing assets like gold and silver.
Unfortunately, investors are once again ignoring and remain improperly allocated to one of the best assets to own with lower rates: real estate.
One option that looks safe and secure at the moment are REITs. In particular, the best marijuana REIT, which we'll show you today, offers tremendous upside while also paying a hefty dividend.
These high-dividend paying REITs make a ton of sense in a market with significant downside risk.
Because interest rates are so abnormally low, even after a brief respite from the collapse in yields, investors are hunting for the kind of income that REITs offer today.
Last week, former U.S. Federal Reserve Chair Alan Greenspan warned that negative interest rates were coming to the United States.
Naturally, investors are nervous about owning bonds with a negative return.
But the recent bond bubble is limiting your chances to generate solid income returns.
For this reason, I recommend you keep an eye on the real estate industry.
