Real estate has long been recognized as a lucrative path to building wealth. However, investing in publicly traded real estate stocks can offer additional advantages such as liquidity, a wide range of options, and the opportunity to enter the real estate market without a substantial initial investment. This article explores the benefits of combining real estate investment trusts (REITs) and how dividing $10,000 evenly across three top-performing REITs can yield both passive income and market-beating returns.
Agree Realty: An Agreeable Outcome
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Agree Realty, a Detroit-based retail REIT, boasts a rapidly growing portfolio consisting of 1,607 properties spread across 48 states, encompassing 33.8 million rentable square feet. With clients that are 68% investment grade, Agree Realty's top five tenants include Walmart, Tractor Supply, Dollar General, Best Buy, and TJX. Since its initial public offering (IPO) in 1994, Agree Realty has achieved a compound average annual return of 12.7%. Moreover, it has consistently increased its dividend by an average of 5.5% per year over the past decade. With monthly dividend payments and a current yield of approximately 3.7%, Agree Realty presents a compelling investment opportunity.
Towering Results with Crown Castle International
Crown Castle International has been a publicly traded company since 1998 and possesses an impressive portfolio of approximately 40,000 cell towers, 80,000 miles of installed fiber optic cable, and 115,000 small cell nodes. CEO Jay Brown emphasized the significance of small cell antennas in the company's second-quarter report, marking 2022 as an essential year of transition. As Crown Castle intensifies the installation of these antennas, critical to the advancement of 5G network rollouts, it aims to achieve annual dividend-per-share growth between 7% and 8%. This focus on innovation and serving major mobile carriers has contributed to Crown Castle's total return tripling that of the S&P 500 since its IPO three decades ago.
Terreno Realty: A Blueprint for Success
Terreno Realty is an industrial REIT with a unique strategy tailored to the logistics sector. Specializing in small warehouses and improved land parcels near vital transportation hubs in cities such as San Francisco, San Jose, Los Angeles, Seattle, New York City, Miami, and Washington, D.C., Terreno Realty has positioned itself to benefit from the expanding logistics industry. Despite a 25% decline in its share price this year, Terreno stock currently yields around 2.5%. The company recently raised its third-quarter 2022 dividend by nearly 18%, demonstrating a commitment to enhancing shareholder value. Terreno continues to expand its portfolio, having invested $316 million in the second quarter of 2022 to acquire additional buildings and land parcels.
Multiply Success with These Real Estate Stocks
Agree Realty, Crown Castle International, and Terreno Realty each offer distinctive portfolios, yet they have consistently outperformed the S&P 500 in terms of total return. By diversifying $10,000 equally among these three REITs, investors can expect impressive long-term results. Not only do these investments offer the potential for market-beating returns, but they also provide a steady stream of passive income. As you embark on your real estate investing journey, consider the benefits of combining the stability and growth potential of real estate stocks with the financial rewards they can offer.
Remember, the key to successful investing lies in diligent research and understanding your risk appetite. By making informed and strategic investment decisions, you can maximize the potential of your $10,000 investment in the real estate market.
