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.

Outlines

00:00

🏢 Introduction to REITs and Top Picks

The speaker begins by expressing their comfort in sharing the best REITs (Real Estate Investment Trusts) for passive income after conducting thorough research. They explain that while they typically invest in physical real estate, they've found interesting opportunities in REITs, which allow investors to own income-producing real estate without direct management. The speaker plans to share their top eight REITs, discuss the pros and cons of investing in them, and emphasize the importance of understanding one's investment goals. They introduce REITs as companies that own and often operate properties like apartments, warehouses, and hotels, and differentiate between individual REITs and REIT ETFs. The first REIT mentioned is Getty Realty Group (GTY), noted for its high occupancy rate and potential for growth due to its smaller market cap.

05:01

📈 Detailed Analysis of Top REITs

The speaker continues with an in-depth analysis of various REITs, discussing their market cap, current price, dividend yield, and historical performance. They cover American Tower Corporation (AMT), Realty Income Corp (O), STAG Industrial (STAG), and Vici Properties, each with unique characteristics and client bases. The speaker highlights the sustainability and growth potential of these REITs, as well as the risks and rewards associated with their market positions. They also touch on the tax implications of REIT dividends, suggesting a Roth IRA as a tax-efficient investment vehicle for higher-income earners. The speaker invites viewers to share their favorite REITs in the comments for community discussion.

10:04

💹 Conclusion and REIT ETFs

The speaker concludes by discussing REIT ETFs, which offer diversification and lower risk compared to individual REITs. They introduce two ETFs: the Vanguard Real Estate ETF (VNQ) and the Schwab US REIT ETF (SCH), both known for their low fees and broad exposure to the REIT market. The speaker outlines the benefits of investing in REIT ETFs, such as steady dividends, high returns, liquidity, and lower volatility compared to individual stocks. They also address the potential cons of investing in REITs, including illiquidity in non-traded REITs, low growth and capital appreciation, and the tax burden on dividends. The speaker encourages viewers to share their thoughts on REITs and to continue their investment journey with the insights gained from the video.

Keywords

💡REITs

REITs, or Real Estate Investment Trusts, are companies that own and often operate income-producing real estate. They allow individuals to invest in a diversified portfolio of real estate assets without directly purchasing properties. In the video, the speaker discusses various REITs as potential investments for passive income, highlighting their appeal for those looking to diversify their investment portfolio and generate a steady stream of income.

💡Passive Income

Passive income refers to earnings derived from a rental property, recurring royalties, or other sources that require little to no effort to maintain. The video emphasizes the potential of REITs to provide passive income, which is a key attraction for investors seeking a reliable cash flow without active involvement in managing properties.

💡Dividend Yield

Dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price. High dividend yields are highlighted in the video as a significant benefit of investing in REITs, as they can offer substantial returns to investors in the form of dividends.

💡Market Cap

Market capitalization, or market cap, is the total value of a company's outstanding shares of stock. It is used in the video to describe the size and scale of different REITs, with larger market caps often indicating more established and stable companies.

💡GTY

Getty Realty Group (GTY) is mentioned as one of the top retail REITs in the video. It owns properties like gas stations, car washes, and auto shops, which are considered essential and have high occupancy rates. The video discusses GTY's high dividend yield and relatively small market cap, suggesting potential for growth.

💡AMT

American Tower Corporation (AMT) is highlighted as a REIT with a large market cap, managing infrastructure properties including communications real estate. The video points out AMT's stability and size as benefits, along with its dividend yield and growth over the past five years.

💡O Realty Income

O Realty Income is a REIT that acquires and manages properties with long-term lease agreements, often with well-established clients. The video emphasizes the company's strategy of spreading risk across numerous properties and having investment-grade credit-rated clients, which contributes to its appeal as a stable investment.

💡STAG

STAG Industrial is a REIT focused on industrial properties, with a client roster including major players in e-commerce and logistics. The video discusses how STAG's stock has been affected by the pandemic and the subsequent changes in demand for warehouse space, noting its current dividend yield and growth rate.

💡Vici Properties

Vici Properties is an experiential REIT that owns a portfolio of gaming, hospitality, and entertainment destinations. The video highlights its geographical diversity and iconic properties, such as Caesar's Palace and MGM Grand, as well as its high dividend yield and significant growth over the past five years.

💡MPW

Medical Properties Trust (MPW) is a self-advised REIT that invests in healthcare facilities. The video notes its high dividend yield and the potential for value investment due to its recent price drop, positioning it as a sustainable option given the constant demand for medical facilities.

💡REIT ETFs

REIT ETFs, such as the Vanguard Real Estate ETF (VNQ) and the Schwab US REIT ETF (SCH), are exchange-traded funds that hold a basket of REITs. The video explains that these ETFs offer diversification and lower risk compared to investing in individual REITs, making them an attractive option for investors seeking exposure to the REIT sector without picking specific companies.

Highlights

Introduction to the concept of REITs as a passive income investment vehicle.

Definition of a REIT and its role in owning and operating income-producing real estate.

Explanation of the two main types of REITs: individual REITs and REIT ETFs.

Advantages of investing in REITs for early retirement and monthly cash flow.

Discussion on the importance of understanding investment goals before choosing REITs.

Presentation of the top eight REITs found after extensive research.

Analysis of Getty Realty Group's (GTY) high occupancy rate and its benefits for investors.

Details on American Tower Corporation (AMT), its market cap, and its focus on communications real estate.

Overview of Realty Income Corp (O), its diversified property management, and client base.

Introduction to Stag Industrial (STAG), its focus on industrial properties, and its clients like Amazon and FedEx.

Discussion on Vici Properties, its experiential real estate portfolio, and iconic properties like Caesar's Palace.

Information on Medical Properties Trust (MPW), its focus on healthcare facilities, and its high dividend yield.

Advantages of investing in REIT ETFs for diversification and lower risk.

Introduction to Vanguard's VNQ, a REIT ETF with a low expense ratio and a history of solid returns.

Details on Charles Schwab's SCH, a low-fee REIT ETF that tracks a broad index of U.S. REITs.

Pros of investing in REITs including steady dividends, high returns, liquidity, and lower volatility.

Cons of REIT investing such as potential illiquidity, low growth, and the tax burden on dividends.

Call to action for viewers to share their thoughts on REITs and contribute to the community discussion.

Transcripts

all right you've asked many times and

now that I feel comfortable after

putting in the research I'm going to

share with you the best REITs that I

found for you to invest for passive

income now for real estate I invest in

actual hard asset real estate like the

actual rental property but after doing

the research for this video I found a

lot of these very interesting and I

really like what I found in these

regions so I'm going to give you my top

eight REITs that I found and then also

the pros and cons of investing in REITs

and let you be able to decide REITs

definitely have great benefits for

retiring early or at least retiring with

a bunch of cash flow every single month

a real estate investment trust or a Reit

is a company that owns and often

operates income producing real estate

such as Apartments warehouses

self-storage facilities malls and hotels

REITs are a way for you to invest in

commercial real estate property without

actually buying and managing those

properties yourself when looking up

different types of reads you'll quickly

become confused because there's a bunch

of two different types but the main two

that I'm going to go over in this video

are the Reit itself and then also Reit

ETFs each individual investor should

definitely look into how it may fit best

into their portfolio and for you

personally try to figure out what

exactly is it that you want do you just

want to have some investment in real

estate because you know you probably

should because it's a different asset

class or do you want the dividends that

it's bringing make sure you understand

the reason for that and let's go over

the top eight REITs that I found

so these are in no particular order but

the first one is gty or Getty Realty

Group this is one of the top retail

reads as it holds a bunch of gas

stations car washes and auto shops cars

aren't going anywhere and these are

vital for us every day real estate they

own is 99.6 percent occupied which is

exceptionally high and keeps the risk

very low for the investor dty has a

market cap of 1.6 billion its current

price is 35 dollars and one cent the

current dividend yield is 4.91 percent

which is very high over the last five

years it's up

41.63 percent now I like this one

because of the sustainability and the

type of real estate that it owns I also

like that it's over 99 occupied and the

other thing that I like that maybe some

might see as a negative is that it's a

little bit smaller so a market cap of

1.6 billion dollars isn't that big in

the grand scheme of things and so while

that might bring a little bit of risk it

also makes it so that there's still a

lot of growth that could happen because

it's not as big as some of these other

ones before we go any further you

definitely need to understand that the

taxes that come from the dividends of

REITs is different than the taxes of

regular dividend stocks REITs will fit

into the ordinary income for taxes where

most company dividends stock fall into

qualified dividends for that reason one

of the best places to have your REITs is

in a Roth IRA for those of you that are

higher income earners you can still have

a Roth IRA by converting through the

back door process that I outlined here

their assets will grow tax-free and your

dividends after retirement age will be a

hundred percent tax free which is an

insane benefit and a way to get massive

passive income for the rest of your life

and just because these Reit Dividends

are taxed a little bit higher than

normal dividends doesn't mean that

that's necessarily bad if you're

receiving double the size of a dividend

but it's taxed a little bit higher you

might still be making more money overall

next up is AMT or American power Court

they have a market cap of over a hundred

billion so this is a hundred times

bigger than Getty from before launched

in 2012 it manages infrastructure

properties including more than 183

000 pieces of multi-tenant

communications real estate put simply

the company owns and operates broadcast

and wireless communication equipment and

infrastructure around the world this

Reit has a current price of

216.72 cents dividend yield is 2.88

percent over the last five years it's up

54.78 now I like this one because of its

size to be honest real estate can

definitely be tricky and can be risky

but when you have a company that has so

many assets under management and has

such a history of being a good company

the risk really starts to fall next on

the list is one that most people who

invest in REITs would say is their top

Reit overall and this one is realty

income Corp ticker symbol o realty

income is a real estate investment trust

that acquires and manages properties

using long-term lease agreements it

manages over 11 000 properties with

clients including CVS Health Walgreens

Dollar General and Dollar Tree realty

income mitigates this risk by spreading

it across thousands of properties that

and the majority of its biggest clients

have an investment grade credit rating

because companies like 7-Eleven Walmart

and Home Depot are not little companies

so they're great tenants to have realty

income has a market cap of 41.93 billion

its current price is

66.85 the current dividend yield is a

nice 4.46 percent and over the last five

years it's grown 38 after much research

this is one of the top ones for me as

well and I really really like this Reit

and if you would take a second go ahead

and comment your favorite Reit so that

anybody watching this especially any

beginners can go ahead and see the ones

that I suggest but also maybe the ones

that you guys talk about I like to give

people a full library of places for them

to be able to begin their research so

that you all can gain value not only

from me but from the community of this

channel so thanks for being awesome and

let's move on to the next read so next

on the list is definitely a fan favorite

and this one is stag stag is a Reit

focused on Industrial properties with a

portfolio of more than 560 buildings

with over 111 million square feet of

usable space in 41 States it boasts a

blue chip roster of clients including

Amazon FedEx and DHL supply chain much

of its portfolio's warehouse space and

when retailers rush to build out their

e-commerce capabilities in the early

days of the pandemic stag saw demand for

its property surge higher but recently

the stock has dropped a bunch since the

recovery of those companies have not had

to rely as heavily on Stags properties

this one has a market cap of 6.25

billion its current price is

34.90 the current dividend yield is 4.21

percent and it has a nice growth rate

with the past five years up

45.24 next on the list is Vici

properties it's an experiential Real

Estate Investment Trust that owns one of

the largest portfolios of Market leading

gaming hospitality and entertainment

destinations including Caesar's Palace

Las Vegas MGM Grand and the Venetian

Resort Las Vegas three of the most

iconic entertainment facilities on the

Las Vegas Strip geographically diverse

portfolio consists of 49 Gaming

facilities across the United States and

Canada the ICI has a market cap of 35.65

billion as a current price of

34.48 a nice current dividend yield of

4.52 percent and over the last five

years it's grown

72.49 this one is definitely the most

exciting on the list for me and it

checks all the boxes of size

sustainability dividend yield and

possible growth now this next one has an

insane dividend yield is becoming a

favorite for a lot of long-term value

dividend investors mpw is the medical

properties trust Inc and it's a

self-advised real estate investment

trust which engages in the investment

acquisition and development of net

leased Health Care Facilities mpw is one

that I'm interested in especially

because it's in the medical field and

medical offices and hospitals are things

that we're always going to need so it's

very sustainable but even more appealing

is the fact that it's one of the more

beaten down stocks and its price has

dropped the most in the past five years

so this one might be in the value

territory mpw has a market cap of 7.24

billion dollars the price is only 12

dollars and nine cents now that current

dividend yield is at 9.59 percent over

the last five years though like I was

saying it's down five percent overall so

this one would definitely be the most

risky of the bunch but might be the one

with the highest upside so those first

six were all REITs and now the next two

are going to be Reit ETFs just like

investing in individual stocks versus

ETFs so Reit ETF is just a group of a

bunch of other REITs all put together

and so it's even more Diversified with

lower risk the first one on the list is

from Vanguard which is very reputable

and always has low fees and this one is

called vnq the Vanguard real estate ETF

invests in stocks issued by real estate

investment trusts companies that

purchase Office Buildings hotels and

other real property the goal is to

closely track the return of the msci U.S

investable market real estate 2550 index

the NQ has an expense ratio of 0.12

percent which is pretty low for an ETF

of REITs over the last 10 years it's had

an average return of over seven percent

per year which isn't bad for a read

because it also has a solid dividend two

of about three percent now the way in

which a dividend is paid is a little

complex here and it's basically a

combination of dividend income as well

as return of capital and capital gains I

like vnq because it's a broad index of a

bunch of types of REITs such as

specialized retail residential and a lot

more you can see here that they own

familiar favorites such as AMT and O So

by owning this Reit ETF you get exposure

to a bunch of top ones the current price

is

89.96 and this is one of the top Reit

ETFs in most portfolios the next wreath

that I like comes from my favorite

investing platform which is Charles

Schwab and this one is called SCH which

is the Schwab us Reit ETF seeks to track

as close as possible the total return of

the Dow Jones Equity all Reit capped

index composed of U.S Real Estate

Investment Trust classified as equities

I like this one so much because it's the

lowest fee for a Reit that I've seen at

.07 percent SCH H has had a 10-year

average return per year of 5.6 percent

and the dividend yield on this one is a

bit more straightforward at right at

about three percent again it holds all

of our favorites like AMT o and Vici I

like this one for the Simplicity and

it's just like in the regular stock

market if you were to hold vti that kind

of tracks the whole U.S stock market

this one to me is very similar in that

nature and it kind of just tracks all

the major REITs to a certain extent so

as far as Simplicity if you wanted

exposure to REITs but you didn't really

want to do a crazy amount of research

SCH might be your best bet so now as far

as the pros and cons of investing in

REITs the pros of investing in Reit

stocks are steady dividends because

REITs are required to pay 90 percent of

their annual income as shareholder

dividends they consistently offer some

of the highest dividend yields in the

stock market next would be high returns

as shown earlier in the video a lot of

these reads have beaten many

ETFs and individual stocks as far as

consistent five-year return next would

be liquidity publicly traded REITs are

far easier to buy and sell than the

tough process of actually buying

managing and selling commercial

properties and the last Pro would be

lower volatility REITs tend to be less

volatile than traditional stocks in part

because of their larger dividends seats

can act as a hedge against the ups and

downs of other asset classes however

they're not totally immune to volatility

but they might be just a little bit less

volatile and now as far as the cons of

REITs they may be illiquid especially

non-traded in private reads publicly

traded REITs are easier to buy and sell

than actual properties but non-traded

REITs and private REITs can be a

different story these REITs must be held

for years to realize potential gains

next would be low growth and capital

appreciation since REITs pay so much of

their profits as dividends to grow they

have to raise cash by issuing new stock

shares and bonds sometimes investors are

not always willing to buy them them such

as during a financial crisis or

recession so REITs may not be able to

buy real estate exactly when they want

to and the last con would just be that

tax burden that I was talking about

while Reit companies pay no taxes their

investors still must pay taxes on any

dividends they receive unless their read

Investments are held in a tax advantaged

account which was like that Roth IRA

that I was talking about before so now

I'm very curious to know your thoughts

on REITs so please comment down below

and get ready to watch this video now to

keep crushing your investing journey and

building that net worth Sky High