Investing in rental properties can be a lucrative way to generate passive income. While there are various methods to create passive income, owning rental properties can provide a stable and consistent stream of revenue. Not everyone can afford to purchase a home, so renting becomes a necessity for many individuals. As a landlord, you have the opportunity to capitalize on this demand and earn rental income.
One approach to investing in rental properties is through real estate investment trusts (REITs) that focus on owning rental homes. These REITs allow investors to participate in the rental property market without the need to directly purchase and manage properties. Two publicly traded REITs that specialize in single-family rental properties are Invitation Homes and American Homes 4 Rent. These REITs offer a convenient way for anyone to start collecting passive income from rental properties.
Invitation Homes is the leading single-family home leasing and management company in the United States. With a portfolio of over 105,000 homes in 16 major housing markets, Invitation Homes focuses on high-demand areas where population and job growth are strong. This strategic positioning allows the company to maintain high occupancy rates and increase rents steadily. Invitation Homes pays a quarterly dividend of $0.28 per share, providing investors with a dividend yield of around 3.1%. The company’s growth strategies, such as acquiring new properties and managing homes for other investors, contribute to its ability to increase dividend payouts over time.
American Homes 4 Rent owns nearly 60,000 single-family properties across various regions in the U.S. The company operates in more than 30 markets, providing a diversified portfolio of rental properties. American Homes 4 Rent pays a quarterly dividend of $0.26 per share, offering investors a dividend yield of around 2.9%. The company has shifted its focus to developing properties for the rental market, with plans to build single-family rental communities and acquire newly constructed homes. This strategic shift is expected to support the company’s growth and dividend increases in the future.
Investing in REITs focused on single-family rentals is a simple and cost-effective way to start collecting rental income. Both Invitation Homes and American Homes 4 Rent have extensive portfolios of rental properties and growth strategies in place to expand their income streams. By investing in these REITs, investors can benefit from a steadily growing stream of dividend income that has the potential to provide long-term financial stability. Whether you are a seasoned investor or new to the world of real estate investing, owning shares in these REITs can be a valuable addition to your investment portfolio.
