RProperty ownership has been on the upswing since strict lockdown and quarantine regulations fizzled out last summer, as would-be homebuyers have excess savings and cash to buy a new home or perhaps an investment property.
In most countries, the property market has been fueled by rising demand, with property prices in some major metropolitan areas having doubled or tripled since the pandemic began in 2020.
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- Real Estate in North America
The real estate market in North America is different now that homebuyers in the United States have found themselves in a red-hot market where home values are skyrocketing and interest rates are also putting more pressure on the market. In Canada, the scene is almost no different, with major metropolitan areas like Toronto and Vancouver seeing prices for the most basic purchases soar by double-digit percentages.
Looking at the performance of these two nations, Toronto real estate has grown an average of 7.8% annually, making property management even more difficult for some small buyers and investors.
Here in the United States, some cities like Manhattan, NY have seen the average home price increase by 5.7% according to recent statistics. The 5% increase in New York is almost completely overshadowed by the 32.6% for places like Phoenix, AZ, among others.
It is clear that buying real estate in the coming year will seem even less possible for the low to middle income bracket, but it is not clear how the market will develop in the coming year as demand remains relatively high and interstate migration This allows you to leave the city behind to work from cheaper cities and states.
While the roaring market has still kept many investors at bay, the overall market performance looks a little different for some real estate stocks and share prices.
With home ownership now becoming more difficult for some people, some are looking to buy real estate stocks and shares, which can perhaps offer them the same type of returns as owning a property or renting.
While not quite the same, since rental income can be far more lucrative than the stock market, a variety of publicly traded real estate companies have produced some promising investment returns for those investors who have seen the real estate market push them aside.
As a different measure of investing, and perhaps to put their savings to some use other than the real estate market, a combination of smart investment decisions can create new meaning for those willing to add real estate stocks through real estate investment trusts (REITs).
- Why Choose Real Estate Investment Trusts?
While it’s possible to gain direct exposure to the stock or real estate market with the help of a hedge fund manager or real estate agent, REITs have become a way for many first-time investors and buyers to earn profits from real estate stocks.
REITs are designed to create significant earnings returns for investors and shareholders and pay them out in the form of dividends. Companies trading or operating under the umbrella of REITs lease land or real estate to tenants and share profits among shareholders.
- Top REITs for first-time investors
One of the largest self-storage companies in US public storage, has more than 2,000 self-storage facilities scattered across the country and has surpassed $3 billion in revenue.
PSA currently has a market cap of $71.61 billion, with stock prices just over $400 per share. Dividend payouts are fairly generous, with yields currently sitting at 2.2%. Public Storage has remained rock solid in its growth over the past few months.
EQIX common stock isn’t relatively cheap, as share prices topped $839.77 at a recent 52-week high, but annual dividend yields currently stand at $10.64 per share.
Equinix itself works on digital infrastructures and offers data centers and services for different markets around the world. In 2019, the company had sales of more than $5.5 billion. The company currently has more than 240 data centers spread across five continents and available in 27 different countries.
Analysis recently identified EXR as a strong REIT buying opportunity for many investors, as share prices have remained relatively low, zigzagging between $200 and $220 per share. Currently, EXR offers a dividend yield of 2.81%, and the company will continue to expand its storage facilities in the coming year.
These and other changes in the company’s operations could mean positive growth in share prices as the market cap currently stands at more than $28.63 billion. Sentiment towards EXR is slightly more positive as the shares have experienced well-placed growth over the years.
AMT has increased its dividend every year, and currently the investment yield is more than 2.3%. The company, which owns multiple properties and structures around the world, leases most of its options to telecom companies.
Share prices are currently generously low, trading just above the $250 level. Trading sessions have shown some strong moves, both down and down, but investors remain bullish on AMT’s prospects as the company offers ample growth opportunities as telecom demand rises.
For something more flexible and affordable, DLR is currently offering $1.22 per share for the first quarter of 2022 after a 5% raise issued in March 2022.
Although payout yields are relatively low, Digital Realty Trust focuses on various sectors such as artificial intelligence, cloud networks for real estate management software, mobile and other financial services. While the company isn’t limited to just one industry, in this case real estate or real estate, for a REIT it can still become a lucrative addition to any investor’s portfolio.
Often overlooked, BRG currently has a market cap of just under $1 billion, with share prices starting at just $26 per share. BRG is considered one of the more frugal options for first-time investors, as it offers a little more room to invest and trade in a budget-priced stock
The dividend yield currently stands at 2.45%, and the company reported net sales of more than $61 million as of December 2021. The company recently completed a merger and acquisition with Black Stone Real Estate in a $3.6 billion deal that closed in late 2021. Enthusiasts and other intraday investors are hoping that this deal could boost share prices for years to come, giving them better trading certainty.
Our last REIT on this list is NXRT, a common stock that trades under $100 with current stock prices for April averaging around $86 per share. NexPoint is best known for acquiring middle-income family homes in desirable locations and prime real estate areas.
The company manages various properties across the United States but has recently become much more popular in the stock market as it offers lucrative investment growth for both novice and experienced investors. With a market cap of more than $2.28 billion and a dividend yield of 1.76%, NXRT offers both low and medium risk.
The hot real estate market has made it quite difficult for the average first time buyer to get their property in their local market. While it looks like the year ahead will bring more challenges and rising property prices, investors are now considering new alternatives that may offer them better returns and broader investment opportunities.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.