These Residential REITs Have Yields Up to 4.2% and Track Records of Dividend Growth
The U.S. real estate market is more unaffordable than ever before, pushing more people to rent rather than buy and making residential real estate investment trusts (REITs) very attractive for long-term investors and those seeking dividend income.
Residential REITs offer investors the benefits of owning rental properties without the hassles of being a landlord or the large up-front expense of acquiring a property. They also carry the benefit of being liquid, since you can sell a stock any time the market is open, compared with a property that could take months or years to sell.
That said, let's take a look at three residential REITs you could buy today.
Camden Property Trust
Camden Property Trust (NYSE:CPT) owns and operates 172 multifamily apartment communities consisting of 58,634 units across 15 major U.S. markets, including Atlanta, Austin, Dallas, Denver, Orlando, Phoenix, San Diego, and Tampa. It has additional four communities under development, which will add 1,166 units to its portfolio when completed.
Camden currently pays a quarterly dividend of $1.03 per share, equating to an annualized dividend of $4.12 per share, which gives its stock a yield of about 4.2% at the time of this writing.
Camden has also raised its annual dividend each of the last two years, and its 3% hike in February has it on track for 2024 to mark the third consecutive year with an increase.
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AvalonBay Communities
AvalonBay Communities (NYSE:AVB) owns or has ownership interests in 299 apartment communities consisting of 90,669 apartment homes across leading metropolitan markets, including Boston, New York City, Charlotte, San Francisco, Seattle, Denver, and Washington, D.C.
AvalonBay currently pays a quarterly dividend of $1.70 per share, equating to an annualized dividend of $6.80 per share, which gives its stock a yield of about 3.6% at the time of this writing.
AvalonBay is also a dividend-growth star. It has raised its annual dividend payment 11 times in the last 13 years, including a 3% hike in January.
An Alternative Option: Arrived Homes
Arrived Homes also offers a way for investors to gain exposure to residential real estate. It's an alternative investment platform, backed by Jeff Bezos and Dara Khosrowshahi, that allows individuals to easily invest in real estate by purchasing shares of rental properties. Investors on the platform earn passive income through the rental revenue while waiting for the properties they invest in to appreciate in value over time.
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