Today I’m going to show you, hands-down, the easiest way to add rental real estate to your portfolio.
Don’t worry—you won’t have to leave your computer! Instead of hitting the streets to buy a four-plex or apartment building to rent out, we’re going to purchase a recession-proof real estate income stream straight from your online brokerage account.
And believe it or not, thanks to a current market anomaly, we can snag better deals online right now than we can in person. I’ll explain the details in a moment—including 2 stocks with yields that double what your average stock pays, and double-digit payout growth, too!
First, let me give you the lay of the residential real estate landscape.
A Bait-and-Switch Market
As I write, apartment vacancy rates across the US are tight—sitting at 6.9%, the lowest level in 24 years!
And if you happen to own a rental abode in the nation’s hottest locales, congrats! Squeezing more income out of it has never been easier. Check out the year-over-year gains in the five best places to be a landlord:
All this makes buying a residential rental property a no-brainer, right?
Because outside those scorching markets, fatter rent checks could soon be history: in March, for example, rents nationwide rose 2.4% from a year ago, which is below the 2.7% inflation rate.
Think about that for a moment: if you can’t raise the rent above inflation, it’s the same as a dividend cut!
And the trend is looking worse.
This year’s rise is down from 2.8% in 2016 and way off from 3.7% in 2015. And late-to-the-party developers are about to throw open the doors on scores of new units, clamping another weight onto rent growth.
That leaves you betting on capital gains—but with mortgage rates rising and more rate hikes ahead, there’s no free lunch here, either.
Which brings me back to those great real estate deals I mentioned earlier.
REITs: No-Hassle Real Estate Profits
They’re real estate investment trusts (REITs)—or companies that own or finance income-producing properties.
They’re a way better option than going DIY, because the REIT does all the work—it buys the properties, fixes the broken elevators and collects the rent—and passes the cash on to you.
Plus, REITs don’t pay federal income tax, so long as they payout 90% of their profits as dividends, which means high yields are common in this corner of the market. The best REITs are throwing out reliable dividend hikes year in and year out, too.
Those are two things your average landlord can only dream about.
And there’s one more thing he’s missing: a decent yield! That’s because the average condo in the US:
- Sells for $264,000
- Rents for $959/month (or $11,508/year) before expenses
Which yields the condo investor a paltry 4.4% on his initial capital. No, thanks!
We’re also ignoring the value of our property baron’s time—to fix leaky faucets, find new tenants, collect rent and dozens of other things that come with the job.
For More Information:- Brett Owens