3 Residential REITs With Yields Up to 4% to Buy for Income in 2024
The U.S. real estate market is more unaffordable than ever before, pushing more people to rent rather than buy and making residential real estate investment trusts (REITs) very attractive for long-term investors and those seeking dividend income.
Residential REITs offer investors the benefits of owning rental properties without the hassles of being a landlord or the large up-front expense of acquiring a property. They also carry the benefit of being liquid, since you can sell a stock any time the market is open, compared with a property that could take months or years to sell.
That said, let's take a look at three residential REITs with yields up to 4%.
Camden Property Trust
Camden Property Trust (NYSE:CPT) owns and operates 172 multifamily apartment communities consisting of nearly 59,000 units across 15 major U.S. markets, including Atlanta, Austin, Dallas, Denver, Orlando, Phoenix, San Diego, and Tampa. It has additional five communities under development, which will add over 1,500 units to its portfolio when completed.
Camden currently pays a quarterly dividend of $1.00 per share, equating to $4.00 per share annually, which gives it a yield of about 4% at current levels. Camden has also raised its annual dividend each of the last two years, and its recent financial performance would support this streak continuing in 2024.
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AvalonBay Communities
AvalonBay Communities (NYSE:AVB) has ownership interests in 296 apartment communities consisting of more than 89,000 units across leading metropolitan markets, including Boston, New York City, Charlotte, San Francisco, Seattle, Denver, and Washington, D.C.
AvalonBay currently pays a quarterly dividend of $1.65 per share, equating to $6.60 per share annually, which gives it a yield of about 3.6% at current levels. The company has also raised its annual dividend 10 times in the last 12 years, making it both a high-yield and dividend-growth play.
American Homes 4 Rent
American Homes 4 Rent (NYSE:AMH) owns and operates a portfolio of about 59,000 single-family homes in the Southeast, Midwest, Southwest and Mountain West regions of the United States.
American Homes 4 Rent currently pays a quarterly dividend of $0.22 per share, equating to $0.88 per share annually, which gives it a yield of about 2.4% at current levels. Its yield may not be as attractive as Camden or AvalonBay, but American Homes 4 Rent has raised its annual dividend each of the last three years, and this streak could very well continue in 2024.
An Alternative Option: Arrived Homes
Arrived Homes also offers a way for investors to gain exposure to residential real estate. It's an alternative investment platform, backed by Jeff Bezos and Dara Khosrowshahi, that allows individuals to easily invest in real estate by purchasing shares of rental properties. Investors on the platform earn passive income through the rental revenue while waiting for the properties they invest in to appreciate in value over time.
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