Top 8 REITs for HUGE DIVIDENDS (Retire Early with Passive Income)

Summary

This video offers an in-depth exploration of the best REITs for passive income investment. The host presents a list of top eight REITs, including Getty Realty Group and American Tower Corporation, highlighting their market caps, dividend yields, and growth rates. The video also discusses the pros and cons of investing in REITs, such as steady dividends, high returns, and liquidity, versus potential illiquidity and tax burdens. Additionally, the host recommends two REIT ETFs, Vanguard's VNQ and Charles Schwab's SCH, for diversified exposure with lower risk.

Takeaways

• 🏢 The speaker shares their top eight REITs (Real Estate Investment Trusts) for passive income after conducting thorough research.
• 🚗 Getty Realty Group (GTY) is highlighted for its focus on retail properties like gas stations and auto shops, with a high occupancy rate and a significant dividend yield.
• 📡 American Tower Corporation (AMT) is noted for its large market cap and management of infrastructure properties, including communications equipment and infrastructure.
• 🏪 Realty Income Corp is praised for its diversified portfolio of over 11,000 properties with strong tenants, offering a substantial dividend yield.
• 🏭 Stag Industrial is a favorite for its industrial properties and blue-chip clients, experiencing a surge in demand during the pandemic.
• 🎰 Vici Properties is an experiential REIT with a portfolio of gaming, hospitality, and entertainment destinations, including iconic Las Vegas Strip properties.
• 🏥 Medical Properties Trust (MPW) is identified for its focus on healthcare facilities, offering a high dividend yield despite recent market volatility.
• 📊 Two REIT ETFs are recommended for diversification and lower risk: Vanguard's VNQ and Charles Schwab's SCH, both with low expense ratios.
• 💰 The benefits of REITs include steady dividends, high returns, liquidity, and lower volatility compared to other asset classes.
• 💡 The cons of investing in REITs are the potential for illiquidity in non-traded REITs, lower growth and capital appreciation, and the tax burden on dividends, which can be mitigated by holding them in tax-advantaged accounts.

Q & A

What is the primary benefit of investing in REITs for passive income?

REITs offer steady dividends as they are required to pay out 90% of their annual income as shareholder dividends, providing a consistent cash flow for investors.

How does Getty Realty Group (GTY) stand out among the REITs mentioned?

Getty Realty Group (GTY) is highlighted for its high occupancy rate of 99.6%, which minimizes risk for investors. It also has a high dividend yield of 4.91% and has shown an increase of 41.63% over the last five years.

What is the significance of a REIT's dividend yield?

A REIT's dividend yield is significant as it represents the percentage of the REIT's price that it pays out in dividends each year, which is an important factor for income-focused investors.

Why might an investor consider placing REITs in a Roth IRA?

Placing REITs in a Roth IRA is beneficial because the assets grow tax-free, and the dividends received after retirement age are also 100% tax-free, providing a tax-efficient way to generate passive income.

What is the role of American Tower Corporation (AMT) in the REIT sector?

American Tower Corporation (AMT) is a leading REIT with a market cap over a hundred billion, managing infrastructure properties including communications real estate, and offering a dividend yield of 2.88%.

What types of properties does Realty Income Corp (O) manage?

Realty Income Corp (O) manages over 11,000 properties with clients like CVS Health, Walgreens, Dollar General, and Dollar Tree, mitigating risk by spreading it across a large number of properties.

How has the pandemic impacted STAG Industrial Properties' portfolio?

The pandemic led to a surge in demand for STAG Industrial Properties' warehouse space as retailers focused on building out their e-commerce capabilities. However, as companies recovered, the stock has dropped as they relied less on STAG's properties.

What makes Vici Properties unique among the REITs discussed?

Vici Properties is unique as it is an experiential REIT with a portfolio of gaming, hospitality, and entertainment destinations, including iconic facilities on the Las Vegas Strip, offering a dividend yield of 4.52%.

Why might Medical Properties Trust (MPW) be attractive to investors despite its recent downturn?

Medical Properties Trust (MPW) might be attractive due to its high dividend yield of 9.59% and its focus on the medical field, which is considered sustainable and essential, potentially indicating value territory for long-term investors.

What are the advantages of investing in REIT ETFs like VNQ and SCH?

Investing in REIT ETFs like VNQ and SCH offers diversification across multiple REITs, lower risk due to broad exposure, and simplicity for investors who prefer not to conduct extensive research on individual REITs.

What are the potential drawbacks of investing in REITs?

Potential drawbacks of investing in REITs include the tax burden on dividends, the illiquidity of non-traded REITs, lower growth and capital appreciation due to the need to raise cash for new investments, and the inherent volatility of the real estate market.