Are you looking for a safe-bet investment that will make you good returns? These top 8 real estate stocks to invest in provide such safe and stable investments.
Introduction
There are numerous reasons to invest in real estate stocks (REITs). For example, real estate stocks allow you to diversify your portfolio. And it goes without saying that the more you diversify your investments, the fewer losses you suffer and more returns you gain. More so, REITs are guaranteed to always bring you good returns, considering there will always be a constant need for housing and shelter.
However, the stock market offers a wide range of real estate stocks to invest in. And not all types of REITs can guarantee to meet your needs and provide you with your desired returns. So, which REITs should you invest in then? Here are the top 8 real estate stocks to invest in:
1. Mid-America Apartment Communities Inc. (MAA)
Mid-America Apartment Communities manage multifamily properties in several Sun Belt cities as a residential REIT. Compared with other regions globally, Mid-America is experiencing a faster recovery in asset values and rental growth than in most countries. And considering that the U.S is currently undergoing a housing shortage, multifamily properties will undoubtedly rise in demand and generate high returns from their stock shares.
2. Prologis Inc. (PLD)
As an industrial type of REIT, Prologis focuses on logistics real estate. The field of logistics is in high demand. Still, it also has a high-cost barrier that prevents other firms from starting a similar business and increasing competition in the market. Prologis has excellent warehouse rent levels and pricing power, attributes that make it worth investing in.
3. Extra Space Storage Inc. (EXR)
This specialty REIT manages different self-storage properties in the United States. Always use the best stock research tools to find your ideal stocks, particularly REITs, since the labor and supply chain are expected to be disrupted and hindered. And when these are disrupted, warehouse construction and inventory will also go down, causing rental and occupancy rates to go high and generate more returns.
4. Equinix Inc. (EQIX)
Equinix is the largest cloud computing center and correlation provider in the world. It specializes in data centers and global internet connections. The REIT company has vast opportunities for site expansion, as well as limited competition in the market. Also, its revenue model is constantly recurring, earning it high earnings visibility in the market. Therefore, this is one of the best real estate stocks you can invest in.
5. Alexandria Real Estate Equities Inc. (ARE)
The Alexandria office REIT provides one of the best property portfolios. Also, it still has a vast opportunity for growth, considering that the REIT currently has approximately 4.8 million square feet undergoing construction. And despite the fact the office REIT took quite a hit in January 2022, this has turned out to be an advantage as long-term investors can buy the stocks for more profits in the long run.
6. Realty Income Corp. (O)
This particular retail REIT focuses on single-tenant buildings in the United States. And thanks to the non-discretionary type of businesses done by most of its tenants, the REIT has been able to withstand the downturn that negatively impacted most businesses in the retail sector. Also, Realty registers the highest dividend yields, with a rate of 4.1%.
7. Weyerhaeuser Co. (WY)
Just like the Extra Space Storage REIT, this is a specialty REIT. It specializes in growing timber and supplying pulp and other forest products. Since there is a high demand for housing construction, the lumber demand is most likely to remain high for a long time. Besides, timber has served as an ideal inflation hedge for all investors for a long time, making the Weyerhaeuser shares a worthwhile investment.
8. Equity Residential (EQR)
As its name suggests, Equity Residential owns and manages different residential apartments in the U.S. Think about this; most urban markets, such as California, include affordability barriers, leading to many homebuyers opting for apartments instead of single-family homes. This has led to high demand for these homes, registering more returns and dividend yields for Equity Residential REIT investors.
A good investment should offer you not only short-term benefits but also long-term advantages. And since land is a constantly appreciating asset, investing in real estate stocks is one of the best investment decisions.
