Real estate has long been considered a powerful tool for building wealth, and for good reason. Investing in real estate can provide a steady stream of passive income while also allowing your wealth to grow as property values appreciate over time. While traditional real estate investing may require a significant upfront investment, there are more accessible options available for those looking to dip their toes into the real estate market with as little as $125.
One such option is investing in real estate investment trusts (REITs). REITs are companies that own, operate, or finance income-generating real estate across a range of property sectors. By purchasing shares in a REIT, investors can gain exposure to a diversified portfolio of properties without the need to directly own or manage real estate themselves. This makes REITs a convenient and affordable way to invest in real estate.
Two REITs that are available for around $125 per share are Camden Property Trust (NYSE: CPT) and Sun Communities (NYSE: SUI). Camden Property Trust is a residential REIT that specializes in multifamily apartment communities in the southern United States. The company owns and operates 172 properties, comprising 58,250 apartments in 15 metropolitan markets. Camden’s stock is currently priced at approximately $125 per share and offers a quarterly dividend of $1.03 per share ($4.12 annually), translating to a 3.3% dividend yield at the current stock price.
Camden focuses on apartments in major metro areas with above-average population and job growth, driving strong demand for rental housing. This trend keeps occupancy rates high and allows for increasing rents above average. Additionally, Camden capitalizes on growth opportunities by developing new apartment communities and acquiring properties, further boosting its rental income and positioning the REIT to consistently grow its dividend over time. Since its public debut over 30 years ago, Camden’s stock price has grown at an average annual rate of more than 5.5%, delivering an average annual return of 11.3%.
Sun Communities is another residential REIT that specializes in unique property types such as manufactured home communities, RV communities, and marinas. The company owns 659 properties across the U.S., Canada, and the U.K., featuring 179,130 developed sites and 48,760 wet slips or dry storage spaces. Sun Communities shares are currently priced at approximately $125 each and offer a quarterly dividend of $0.94 per share ($3.75 annually), providing a dividend yield of around 3%.
Manufactured home communities have proven to be excellent long-term investments for wealth growth, as they enjoy steady demand and allow owners to raise rents consistently. Sun Communities has achieved 20 consecutive years of positive net operating income (NOI) growth, with its NOI growing at a compound annual rate of 5.2% since 2020, outpacing the REIT sector average. The REIT has also enhanced shareholder value through strategic investments, expanding its manufactured home community portfolio and diversifying into niche property types. Over its history as a public company, Sun Communities’ share price has grown at an average annual rate of more than 6%, delivering a total annual return of 12.8% to shareholders.
Both Camden Property Trust and Sun Communities exemplify the potential of real estate investing for generating income and long-term wealth. With strong prospects for continued income and growth, these REITs could be excellent options for anyone looking to start earning passive income and building wealth through real estate. Real estate offers a unique opportunity to earn passive income while benefiting from steady price appreciation, making it a valuable addition to any investment portfolio.
