Want More Money? Consider These REITs
One of the pillars of successfully growing your wealth is allocating some of your investments into hard assets.
There are MANY different varieties of hard asset investments with superior profit potential over ordinary stocks.
Precious metals and energy are just two of the many hard asset markets we’ve covered.
But there’s another hard asset market, rich with profit potential, that often gets overlooked when discussing hard assets…
I’m talking about real estate, which, along with gold, many investors consider the ultimate hard asset and a cornerstone of wealth-building portfolios.
The Easiest Way to Profit in Real Estate
By far the easiest way to invest in real estate today is through real estate investment trusts (REITs).
For those not familiar with REITs, they’re a lot like mutual funds, but rather than investing in stocks or bonds, they put their cash to work by buying apartment buildings, office space and shopping centers.
Like energy MLPs, REITs must, by law, pass the vast majority of their income along to investors via dividends. And when REITs get cheap, as they are right now, those dividend yields get very attractive.
REITs are the simplest, most hassle-free way to become a real estate baron without being a landlord and dealing with constant maintenance, repairs, depreciation and rent collection.
They are also a great way to build wealth, especially recently. The Dow Jones U.S. Real Estate index gained 26% in 2019 through the end of October — better than the S&P 500’s return of 23.5%.
REITs are powerful income-generating assets as well, offering you a much higher stream of dividend income than ordinary stocks, with a 2.6% average yield.
And some REITs pay you much more than that!
My Favorite REIT Moves Today
The easiest way to invest in REITs is through mutual funds or, better yet, ETFs, like the Vanguard REIT ETF (VNQ).
However, index investing only gets you average yields, in this case a not-too-shabby 3.5%.
Among individual REITs, you can earn much higher yields. Consider Ventas (VTR), which owns and operates health care facilities in the U.S., with an indicated yield near 6%.
Another subsegment of this sector is REITs that invest in commercial and residential mortgages. One ETF in this space that looks really attractive is iShares Mortgage REITs ETF (REM), which pays you a juicy yield of 11%!
Bottom line: REITs have been unfairly maligned this year due to overblown fears of higher interest rates.
That’s created a bargain buying opportunity coupled with rich dividend yields, which for my money is another creative way to earn higher income today.
Here’s to growing your wealth,