Collect 90% of This Asset’s Profits
Did you play Monopoly as a kid?
The winner always amassed the most hotels by the end.
It might surprise you to know we can use the same strategy to win at the retirement savings game.
It all has to do with a simple investment that is very often overlooked by folks.
Stop Leaving Easy Money on the Table!
Most investors aren’t familiar with real estate investment trusts, or REITs.
And many are even less familiar with the specific REITs I will show you today.
REITs invest in a wide variety of real estate, from office buildings to storage units to apartment buildings.
The niche I’m talking about today are the hotel/lodging REITs, which own and manage hotels and resorts.
Hotel REITs can range from budget hotels along busy interstate highways to luxurious five-star resorts in highly desired vacation destinations.
There are lots of hotel REITs — more than 20 — to choose from. And they are especially attractive to income-focused investors because Congress made them exempt from corporate taxes, provided several strict conditions are met.
The most important of which is that they must distribute at least 90% of all of the profits in the form of dividends to shareholders.
This is why REITs pay much fatter dividends than blue chip stocks.
How much fatter, you ask?
Hotel REITs pay out an average dividend yield of 5.5%!
And here’s how you get your slice of that money.
Score Real Estate Tycoon Riches
Well-run hotels are cash cows and generate huge amounts of free cash flow.
If you’re the type of investor who enjoys cashing in dividend checks, you should consider investing in prime hotel properties via real estate investment trusts (REITs) that focus on hotels, such as:
- Xenia Hotels & Resorts (NYSE: XHR) — Owns 41 luxury hotel properties under the Fairmont, Marriott, Westin, Renaissance and Kimpton brands.
- Ryman Hospitality Properties (NYSE: RHP) — Owns just four hotels but they are prime destination resorts under the Gaylord name, including the Gaylord Opryland Resort & Convention Center in Nashville and Gaylord Palms Resort & Convention Center near Orlando.
- Host Hotels & Resorts (NYSE: HST) — The largest hotel REIT in the world, with 93 properties and 52,000 rooms, including the Hyatt Regency Maui Resort and Spa, the Ritz-Carlton Naples and San Francisco Marriott Marquis.
These hotel REITs pay fat dividends:
- 5.06%: Xenia Hotels & Resorts
- 4.26%: Ryman Hospitality Properties
- 4.2%: Host Hotels & Resorts.
Bottom line: If you’re looking to add real estate-based holdings to your portfolio — especially ones that pay fat dividends and buffer you from market volatility — these REITs are certainly worth considering.
Here’s to growing your wealth,
Mike Burnick
Chief Income Expert, Mike Burnick’s Wealth Watch
