Investing in real estate on its own can be intimidating with the large sum needed to purchase various properties. However, REITs, which is short for real estate investment trusts, make it possible for people to realize their dream of being a real estate investor for a small sum, such as $5.
Like real estate investments, they also enable investors to receive impressive returns. In fact, 90% of the REITs taxable income is paid to shareholders in the form of dividends, which, in some cases, can even exceed the market average.
REITs are like IPO stocks, except you own a piece of hundreds or thousands of real estate investments, which also brings with it the opportunity to diversify portfolio risks.
However, like many other investments, recent trends in the market have also caused REITs to experience a drop.
WP Carey Inc. (New York Stock Exchange: WPC)
WP Carey Inc. is expected to be the best REIT to purchase for 2021, with its portfolio of over 1,200 triple net properties, 47% of which are warehouses and industrial spaces that are expected to gain from e-commerce activities.
Its portfolio also includes office, retail, and self-storage properties, which are also located throughout the U.S. and Northern and Western Europe.
The properties have more than 300 tenants, which is an occupancy rate of 98.9%, and they have a weighted-average lease term of 10.6 years, and they also generated close to 100% expected returns for the third quarter.
As of current, shares of WPC are producing a 6.2% return, and the share price is expected to continue to increase in 2021.
City Office REIT Inc. (New York Stock Exchange: CIO)
City Office REIT Inc. owns office buildings located throughout the Southeastern and Western U. S., including Dallas, Orlando, Seattle, Phoenix, San Diego, Portland, Tampa, and Denver.
What makes their REIT so attractive is the properties are located in mid-sized areas with many amenities, big employers, and top universities like larger cities but with a lower cost of doing business, which has an influx of companies relocating to them.
CIO’s properties have an occupancy rate of 93%, and they have already received nearly 100% of expected rents.
Their shares are also generating 8.4% in returns with the potential for a total return in the three figures in 2021 due to the growing demands for its office properties.
Equity Residential (New York Stock Exchange: EQR)
Equity Residential has over 300 apartment properties throughout New York City, Boston, San Francisco, Seattle, Denver, and Southern California with over 70,000 tenants with average incomes in the high 5-figures, with a 94.8% occupancy rate and a collected 97% expected rent revenue in the third quarter, which makes them particularly impressive.
The REITs shares are currently producing more than a 4% yield, with a 50% appreciation potential in 2021.
These are just some of the best REITs for 2021, and the work has already been done for you, so you may consider them a good place to start. If you are looking for REIT alternatives,Ā you can consider investing in a real estate syndication. Most syndications accept passive investments with amounts starting from $50,000. One of the advantages of investing in a real estate syndication is that most deal sponsors use advancedĀ software for real estate investing. It allows passive investors to view and analyze IRR, cash on cash return, equity multiple, etc., before investing funds into a deal.