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The Ten Best Residential and Apartment REITs for Income: A Guide for Investors

CEO Khai Intela
Investing in real estate investment trusts (REITs) has become increasingly popular as share prices soar and returns continue to climb. With a growth of nearly 40% over the past twelve months, it's crucial to choose...

Investing in real estate investment trusts (REITs) has become increasingly popular as share prices soar and returns continue to climb. With a growth of nearly 40% over the past twelve months, it's crucial to choose the right REITs for long-term investment. In this article, we will explore the ten best residential and apartment REITs that have consistently produced high dividend yields.

Best Residential and Apartment REITs

Camden Property Trust (NYSE: CPT)

best apartment reits Camden Property Trust is a multifamily apartment REIT that owns, manages, and develops apartment buildings and units. With a portfolio of over 165 apartment communities and more than 59,000 apartment units across the United States, Camden has established itself as one of the largest publicly traded multifamily apartment REITs. It has consistently been recognized as one of Fortune's 100 best companies to work for, securing the number eight spot in 2021. With its strong financial profile, including an A credit rating, and a dividend yield of 2.6%, Camden Property Trust is an attractive investment option.

AvalonBay Communities, Inc. (NYSE: AVB)

best apartment reits AvalonBay Communities focuses on multifamily housing and apartments, primarily in the United States. With properties in major cities such as New York City, San Francisco, and Washington DC, AvalonBay has become the third-largest owner of apartments in the country. Its diverse portfolio, which includes properties in 12 different states, ensures stability even in challenging market conditions. With a dividend yield of 2.59% and share prices up by 30% over the past year, AvalonBay Communities is an appealing choice for investors.

Invitation Homes Inc. (NYSE: INVH)

best apartment reits Invitation Homes is the largest owner of single-family properties in the United States. It owns and manages approximately 80,000 single-family homes across 16 cities, with a focus on providing exceptional customer service and worry-free rental experiences. With a nearly 80% resident retention rate, Invitation Homes has consistently seen positive growth over the past year. Single-family home rents have increased by 10.9% year over year, and Invitation Homes is well-positioned to continue benefiting from this trend. With a solid dividend yield of 2.83%, Invitation Homes presents a valuable investment opportunity.

American Homes 4 Rent (NYSE: AMH)

best apartment reits American Homes 4 Rent focuses on single-family home rentals and currently owns more than 55,000 homes across 22 states. With a focus on move-in-ready homes in desirable neighborhoods with good schools, American Homes 4 Rent has become a significant player in the single-family home rental market. Despite recent fluctuations in share prices, the company has seen notable growth over the past year, and its financial numbers, including a 1.83% dividend yield, indicate a promising future. However, it's essential to be mindful of potential overvaluation and select an appropriate entry point for investment.

Apartment REITs to Buy

Essex Property Trust (NYSE: ESS)

best apartment reits Essex Property Trust focuses on multifamily apartment buildings, with a portfolio covering the West Coast. With 250 apartment complexes and over 60,500 apartment units, Essex offers investors exposure to a significant share of the multifamily real estate market. The company's expansion, including the acquisition of BRE properties in 2014, has resulted in a market capitalization of $18.6 billion. Essex has shown steady growth throughout 2021, with a high dividend yield of 3.10%. This, along with its strong market presence, positions Essex Property Trust as an attractive investment opportunity.

Independence Realty Trust (NYSE: IRT)

best apartment reits Independence Realty Trust owns multifamily properties throughout the United States, with a focus on growing markets in the southeastern region. The recent merger with Steadfast Apartment REIT has significantly increased IRT's portfolio, expanding its presence to additional states such as Texas, Oklahoma, and Colorado. IRT balances its portfolio with a mix of older properties that can be renovated and more stable tenant bases, ensuring resilience in various market conditions. Share prices have seen consistent growth, climbing by 70% over the past year. With an increased dividend yield of 2.89%, Independence Realty Trust offers a compelling investment opportunity.

Cheap Apartment REITs

Apartment Investment and Management Company (NYSE: AIV)

best apartment reits Apartment Investment and Management Company, also known as Aimco, stands as one of the largest apartment-focused REITs in the United States. With a diverse portfolio spanning 13 states and Washington, D.C., Aimco caters to a wide variety of renters in both urban and suburban areas. This diversification has allowed Aimco to stay financially successful even in uncertain market conditions. Share prices have experienced some fluctuations over the past year but remain 33.57% higher than in 2021. Aimco's strong financial performance, including higher-than-expected revenue and net income, indicates significant growth potential. With a dividend yield of 3.4%, Aimco is a compelling investment option.

Equity Residential (NYSE: EQR)

best apartment reits Equity Residential is one of the largest apartment REITs in the United States, with properties in major cities across the country. The company's holdings, comprising over 309 properties and nearly 75,000 units, have proven to be highly profitable. Despite a slight decrease in funds from operations (FFO) in its latest earnings report, Equity Residential has reported a 15% increase in FFO per share and a 15.3% rise in the value of new leases. The company's quarterly dividend has also been increased to $0.625 per share, providing a 3.4% yield. Equity Residential represents an opportunity to earn passive income while benefiting from the real estate industry's steady growth.

High Yield Apartment REITs

Mid-America Apartment Communities (NYSE: MAA)

best apartment reits Mid-America Apartment Communities stands as the largest owner and property manager of multifamily residential buildings in the United States. With nearly 300 apartment complexes and over 101,500 units, MAA also owns mixed-use commercial spaces, providing a unique investment opportunity. The company has experienced steady growth over the past year, with share prices soaring by 40%. MAA's dividend yield of 2.79% and its mix of residential and commercial properties make it a standout choice for investors seeking both income and long-term growth.

American Campus Communities (NYSE: ACC)

best apartment reits American Campus Communities focuses exclusively on student housing, making it a unique player in the apartment REIT market. With a portfolio of dorm-style apartments on 93 different campuses, American Campus Communities caters to the housing needs of students across the United States. The consistent demand for student housing ensures high occupancy rates, providing stability for investors. Share prices have shown steady growth of 27% over the past year, and the company offers a solid dividend yield of 2.89%. With recent acquisition by Blackstone for $12.8 billion, American Campus Communities presents an enticing investment opportunity.

Should You Buy Residential and Apartment REITs?

With the ongoing return to normalcy and the strong demand for single-family homes and multifamily housing, residential and apartment REITs have proven to be stable and profitable investments. Unlike hotel and office REITs, which have suffered significant losses due to the pandemic, residential and apartment REITs have remained resilient throughout uncertain times. These REITs have experienced substantial growth over the past year, and many offer attractive dividend yields. As this trend is expected to continue, now is an excellent time to consider adding these REITs to your investment portfolio. However, it's crucial to assess the specific attributes of each REIT before making an investment decision.

Where to Buy Residential and Apartment REITs

Residential and apartment REITs can be found on major exchanges, making it essential to use a platform that can provide access to those markets. Platforms like Webull and Robinhood offer comprehensive search features to help investors discover valuable stocks amidst market noise. Webull's platform is packed with features for in-depth analysis, while Robinhood offers a user-friendly interface for easy stock searches. These platforms also provide commission-free investments, making them attractive choices for investors looking to add residential and apartment REITs to their portfolios.

Best Apartment and Residential REITs: Final Thoughts

The surge in apartment and residential REITs can be attributed to the return to normalcy across the country. This upward momentum shows no signs of stopping, making these REITs an attractive choice for both companies and traders. Furthermore, most apartment and residential REITs offer dividends, providing investors with long-term growth and passive income opportunities. As with any investment, it's important to conduct thorough research and understand the specific attributes of each REIT to make informed decisions.

Residential and Apartment REITs FAQ

Are Residential REITs a Good Investment?

Residential REITs can be a good investment option. They provide stability and consistent income through long-term leases with quality tenants, offering the potential for capital appreciation as the rental market strengthens.

Are There Any Residential REITs?

Yes, there are several residential REITs that focus on different sectors such as apartments, student housing, senior living, and manufactured homes. Some of the best residential REITs include Camden Property Trust, AvalonBay Communities, and Invitation Homes Inc.

Are REITs a Good Investment in 2022?

Yes, REITs are expected to continue their upward trend in 2022. They offer stability, income, and modest growth potential, making them popular and liquid investments in the market.

Can You Get Rich Investing in REITs?

While it is possible to accumulate wealth through investing in REITs, they are generally considered slow growers. However, the real estate sector has performed exceptionally well, and REITs can provide solid returns on investment over time.

Can You Lose Money in REITs?

As with any investment, there is a potential for loss when investing in REITs. It is essential to conduct thorough research and carefully evaluate each REIT's financials and market conditions before making investment decisions.

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