3 REITs You Must Own to Get Rich! What if I told you we could own a slice of the world? And not some crappy piece, I mean some nice parts that pay you income every month!
This is not a dream, this is 100% reality when investing in high quality real estate investment trusts.
What’s the future?
Your a smart person that is paying attention in the world. The now and future is about Data, high quality retail, housing, medical, telecom towers and industrial spaces like amazon warehouses.
Why not own a piece of the profits? Why not own a piece of the now and the future? It is right in front of our faces to grab.
In general I own my piece through Vanguard Real Estate fund (VNQ) comprised of hundreds of high quality REIT’s.
Great question. Let me tell you why I am a heavy real estate investment trust investor. Firs of all, there is something there. Many businesses, investments and crypto are not fundamentally supported by anything tangible. If a new better crypto comes around, then the old one goes poof. If a competitor out competes a top business, then the value goes down. If a technological change disrupts a certain industry, then the business can go down.
This is basically what Warren Buffett talks about when he wants to find businesses to invest in with wide moats. Competition is blocked from getting over that wide moat.
Real Estate is Different
I believe well managed REIT’s have built in wide moats. The reason is because underpinning their business they have something that can never be recreated: real property.
Realty Income (O), 5% dividend yield
Yes, Realty Income, the golden child of REITs for damn good reasons.
To date, the company has declared 637 consecutive common stock monthly dividends throughout its 54-year operating history and increased the dividend 121 times since Realty Income’s public listing in 1994 (NYSE: O).
They own and operate properties with tenants such as Home Depot, Kroger, Fedex, 7-11, Walgreens, Walmart, CVS and more. It’s literally a diversified lot of well managed properties and diverse tenants.
Realty Income, The Monthly Dividend Company, is an S&P 500 company and member of the S&P 500 Dividend Aristocrats index.
Trading at 44.5% below our estimate of its fair value.
Earnings are forecast to grow 8.62% per year
Earnings grew by 54.4% over the past year
Pays a high and reliable dividend of 5.15%
High-Quality Real Estate
Triple net leases allow us to reduce exposure to rising costs associated with taxes, maintenance, insurance and other operating expenses to better preserve consistent cash flow for our investors.
Check out REIT’s for Dummies by Brad Thomas:
Crown Castle (CCI), 6% yield
Crown Castle Inc. is a real estate investment trust and provider of shared communications infrastructure in the United States headquartered in Houston, Texas.
Technology is changing the way we live, work and interact with the world around us. We don’t go online anymore. We exist there. Our smartphones and tablets are connected, of course, but soon things like traffic lights, machines, appliances and autonomous cars will all be online.
These connections are all made possible by our unique network of communications infrastructure—towers, small cells and fiber. They all work together to set the stage for new innovation—to bring the world’s biggest ideas and possibilities to people and businesses who need them.
WP Carey (WPC) 6.3% yield
WPC is another quality well managed and diversified REIT that is currently at attractive prices and has a juice yield. It has been hit since it holds about 18% of its portfolio in office properties. Those properties either need to be filled again, possible, or re imagined, possible as well.
If you can deal with a little uncertainty over the near term, you might want to give this REIT a try, given that it hasn’t been this cheap since the last bear market. It has a number of enticing attributes.
For example, W.P. Carey is one of the largest net-lease REITs. It is not an upstart with a short history, it is a well-known and respected company. As one of the largest players in the net-lease niche, it also has the scale to get sizable transactions done. Both of these factors make it an attractive financial partner to potential tenants.
Then there’s the wide diversification within the portfolio. Roughly 29% of rents come from industrial assets, 24% from warehouses, 17% from retail, 16% office (as noted above), 4% self storage, and a rather large 10% from “other.” The company also generates a sizable 39% of rents from outside the United States, mostly Europe. You would be hard pressed to find a REIT with as much diversification.
This broad exposure to different property markets and geographic regions allows W.P. Carey to be highly opportunistic in its investment approach, something for which highly focused net-lease peers simply don’t have the portfolio leeway. The self-storage assets being sold to U-Haul, for example, could be replaced with warehouses and it wouldn’t be a business model stretch in any way.