Investing in real estate can be a fantastic way to generate passive income. Rental properties typically throw off more cash than their monthly expenses, enabling investors to pocket the difference as passive income. There are lots of ways to invest in rental properties, but one of the easiest for beginners is to invest in real estate investment trusts (REITs). These entities are low-cost and as passive as they get, as no management is necessary.
Three great REITs for beginners to buy are Realty Income (O), Invitation Homes (INVH), and Extra Space Storage (EXR). You can buy a share of each for less than $250 combined, making it an affordable way to start building a real estate portfolio.
Realty Income is almost like a one-stop shop for real estate investing. The diversified REIT owns 15,450 properties across all 50 states and several European countries. It focuses on owning free-standing properties secured by long-term net leases, providing predictable rental income. Realty Income pays a monthly dividend, making it great for those seeking passive income. With a solid track record of dividend growth and a strong financial profile, Realty Income is a core real estate holding for investors.
Extra Space Storage is the leading self-storage REIT, owning or managing 3,862 properties across 42 states. The company pays a quarterly dividend and has seen significant dividend growth over the past decade. With a strong balance sheet and a focus on expanding its portfolio, Extra Space Storage offers investors the opportunity for income growth and stability.
Invitation Homes is a residential REIT focused on single-family homes, owning over 110,000 homes across 16 core markets. The company has a track record of dividend growth and is well-positioned to continue increasing its dividend in the future. With a focus on high-growth markets and a pipeline of new homes under construction, Invitation Homes offers investors a unique opportunity in the real estate market.
Realty Income, Invitation Homes, and Extra Space Storage are great REITs for beginning real estate investors to buy. They offer exposure to diverse segments of the real estate market and have rock-solid financial profiles. With the potential for attractive dividends and income growth, these REITs provide investors with a low-cost way to start building a high-quality portfolio of income-generating real estate.
In conclusion, investing in real estate through REITs can be a lucrative way to generate passive income. By investing in high-quality REITs like Realty Income, Invitation Homes, and Extra Space Storage, investors can build a diversified real estate portfolio with the potential for income growth and stability. With affordable entry points and strong financial profiles, these REITs are ideal for beginners looking to start investing in real estate.
