Equity real estate investment trusts primarily focus on the purchase of commercial properties. They rely on tenant rent to generate income.
Since REITs must pay 90% of their taxable income to shareholders, the dividend yield tends to be higher than the average stock in the S&P 500.
With the Vanguard Real Estate ETF (ARCA: VNQ) down roughly 33.79% year-to-date, it may be an opportune time to open a position in your favorite real estate investment trust.
When investing in equity REITs, the investor must be aware of which model the firm follows such as sales leasebacks or business development company (BDC), which tend to hold more risk.
Here are three equity REITs primarily investing in apartments and single-family homes.
- Independence Realty Trust Inc. (NYSE: IRT) is offering a dividend yield of 3.55% or 56 cents per share annually, using quarterly payments, with an inconsistent track record of increasing its dividends. Independence Realty Trust owns and manages apartment communities primarily in the Southeast and Midwest of the U.S. Independence Realty Trust owns and operates 120 communities accounting for 35,594 units, while its net operating income grew by 69% due to its exposure in the Sunbelt state.
- Mid-America Apartment Communities Inc. (NYSE: MAA) is offering a dividend yield of 3.46% or $5.00 per share annually, making quarterly payments, with a stellar track record of increasing its dividends for 11 consecutive years. Mid-america Apartment Communities is a real estate investment trust engaged in the acquisition, operation, and development of multifamily apartment communities primarily located in the southeastern and southwestern U.S. Mid-America Apartment Communities has ownership interest in more than 101,000 apartment homes, including those in communities under development, across 16 states and the District of Columbia, as of June 2022.
- American Homes 4 Rent (NYSE: AMH) is offering a dividend yield of 2.30% or 72 cents per share annually, through quarterly payments, with a track record of increasing its dividends once in the past year. American Homes 4 Rent is focused on acquiring, operating, and leasing single-family homes as rental properties typically throughout the Southern and Midwestern regions of the U.S. As of June 30, the company's portfolio consists of more than 58,700 single-family properties in select submarkets across 22 states.
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