Real estate investment trusts (REITs) saw significant price drops after the Covid-19 pandemic hit.
Hotel, resort, and office REITs have seen massive losses, as was expected.
However, the best apartment and residential REITs have defied expectations and have been able to stay afloat.
Last year’s economic turmoil has led many families to downsize and move into multifamily apartment buildings.
Additionally, others in populated urban centers have moved to rural areas because of the lower cost of living and increased space.
As a result of these changes, a vast majority of apartment and residential REITs have rebounded to new heights in 2021.
Read on to see our list of the best apartment and residential single-family REITs for this year.
Best Apartment and Residential REITs
Camden Property Trust (NYSE: CPT)
Camden Property Trust invests in multifamily apartment real estate.
Founded in 1981, this REIT owns, manages, develops, acquires, and constructs apartment units and apartment buildings.
While headquartered in Texas, Camden owns a portfolio of 172 apartment communities with over 58,000 apartment units across the U.S.
As one of the largest publicly traded multifamily apartment REITs, Camden was the first multifamily company to make the list of Fortune’s 100 best companies to work for.
It continues to make the list year after year.
After a frightening drop in the early days of the pandemic, Camden has surpassed its previous high share price and sits near $150 per share.
Like many other REITs, Camden Property Trust has an excellent dividend yield of 2.26%.
AvalonBay Communities, Inc. (NYSE: AVB)
Headquartered in Virginia, AvalonBay Communities is another REIT that focuses on multifamily housing and apartments.
The company is currently the 3rd largest owner of apartments in the United States, with over 80,000 apartment units.
Their portfolio includes properties in a wide range of cities, including New York City, Washington DC, Seattle, Los Angeles, and San Francisco.
This diversity can help AvalonBay see profits even if one region of the country is struggling.
AvalonBay Communities is currently a high dividend yield REIT at 2.87%.
The company recently overtook its previous all-time high stock price after seeing a solid year of growth to date.
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Best Residential REITs
Invitation Homes Inc. (NYSE: INVH)
Invitation Homes is the largest owner of single-family properties in the U.S., owning and managing approximately 80,000 single-family homes across 16 cities.
Since the single-family home rental industry seems to be overly saturated with ‘mom and pop’ businesses, Invitation Homes hopes to break this mold.
The company prides itself on the worry-free process it provides, including exceptional customer service and 24/7 emergency maintenance.
Single-family homes have performed much better throughout the pandemic than multifamily properties.
The company boasts nearly 80% resident retention as a result.
With so many people still working from home, there’s less need to be in dense urban environments.
As with many other REITs, Invitation Homes struggled through 2020 but came out strong on the other side.
In September of this year, the company reached a new all-time high stock price.
Now may be a great time to buy to follow the forward momentum of single-family rental housing into the future.
Experts project a 17% increase in returns for Invitation Homes throughout 2021.
American Homes 4 Rent (NYSE: AMH)
American Homes 4 Rent is another single-family home rental REIT.
Based in California, American Homes 4 Rent is diverse, with more than 53,000 homes across 22 states.
The highest concentration of American Homes’ portfolio is in Atlanta, Georgia, where 9.3% of their homes are located.
The company went public in 2013 and quickly recovered from the share price dip at the start of the pandemic.
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American Homes 4 Rent carried that momentum to new heights throughout 2021.
This is likely due to population shifts toward residential properties.
Some experts indicate this stock may be overvalued, and investors should keep their eyes peeled for a good moment to buy.
Apartment REITs To Buy
Essex Property Trust (NYSE: ESS)
Founded in 1971, Essex Property Trust is a REIT focused on multifamily apartment buildings.
Their real estate portfolio covers much of the West Coast of the U.S. and includes a single office building.
In addition to their only office building, Essex owns 250 apartment complexes with over 60,500 apartment units.
After the acquisition of BRE properties in 2014, the company was officially added to the S&P 500.
Essex has now reached a market cap of $20.82 billion.
The company emerged from a low year in 2020 to see solid share growth throughout 2021.
It is once again nearing the all-time high stock price it saw back in 2019.
They also have kept a 2.61 percent dividend yield.
Independence Realty Trust (NYSE: IRT)
Independence Realty Trust (IRT) is based in Philadelphia, Pennsylvania, but owns multifamily properties throughout the United States.
Most of their properties are in growing markets in the southeastern United States cities like Atlanta, Raleigh, and Tampa.
While the company already has over 16,000 units under its belt, IRT recently announced a merger with Steadfast Apartment REIT.
The merger will nearly triple IRT’s footprint around the region.
Instead of focusing on newer properties, IRT has balanced its portfolio with a number of older properties that it can renovate.
The company also focused on acquiring properties with a very stable tenant base, helping it survive the harsh market conditions of 2020.
Another factor that makes IRT so appealing is its dividend yield, which currently sits at 2.31 percent.
While this stock dropped significantly at the beginning of the pandemic, IRT’s share price has consistently increased since.
Shares currently sit at an all-time high for the company.
Cheap Apartment REITs
Apartment Investment and Management Company (NYSE: AIV)
This is one of the largest apartment-focused REITs in the country.
The company has a very diverse portfolio of properties spanning 17 states and Washington, D.C.
What helps this REIT stay financially successful is its diverse portfolio.
It has properties in both urban and suburban areas, catering to a wide variety of renters.
Like many others in the real estate industry, this stock took a significant hit during the height of the COVID-19 pandemic.
Fortunately, their stock price has climbed back to pre-Covid levels at nearly $7 per share.
Net income is still down as of Q2 of this year, but the company did see a significant increase in revenue.
The company hopes to see a positive earnings per share in Q3 as it did back in Q1.
Equity Residential (NYSE: EQR)
Headquartered in Chicago, Equity Residential is one of the largest apartment REITs in the United States.
Additionally, the company is the 10th largest apartment property manager in the U.S.
Between investments in Southern California, San Francisco, Washington, Washington DC, New York, Boston, Seattle, and Denver, Equity Residential owns or invests in over 309 properties.
These properties provide nearly 80,000 units for Equity Residential.
The company’s holdings in many of the largest cities in the U.S. tend to be very profitable as the world moves out of the pandemic.
After a rough 2020, Equity Residential’s stock price has increased steadily through 2021.
Investors are starting to feel more bullish about urban rental properties now that COVID-19 restrictions are letting up around the country.
In addition to a steady share price increase, Equity Residential has kept a dividend yield of nearly 3 percent.Stock Advice That Beats The Market! Stock Advisor's recommendations have beaten the market over the past 19 years. Tired of picking losers? Stock Dork readers can join for only $99 a year! Check out Stock Advisor today!
High Yield Apartment REITs
Mid-America Apartment Communities (NYSE: MAA)
Mid-America Apartment Communities is the largest owner of multifamily residential buildings in the U.S.
The company is the 7th largest property manager for multifamily residential buildings with over 300 complexes, constituting over 100,000 units.
Additionally, Mid-America Apartment Communities owns four office buildings, which is an interesting point of diversification.
These statistics have placed it firmly on the S&P 500 list.
Investors seeking high dividend yields should look no further than Mid-America, with a dividend yield of 2.22 percent.
After an initial drop in share price in March of 2020, the company quickly rebounded and now sits at an all-time high.
This company’s mix of residential and commercial properties makes it an exciting choice for REIT investors.
American Campus Communities (NYSE: ACC)
American Campus Communities is a unique apartment REIT that focuses on student housing.
The company has an extensive portfolio of dorm-style apartments throughout the U.S.
This stock struggled last year as universities held classes online, and many students moved back in with their parents.
However, many universities have reopened for the 2021-2022 school year.
Despite this year’s economic challenges, this REIT does have a robust business model.
Universities have a new influx of students every year that need housing, which helps keep their occupancy rates high.
American Campus Communities has regained its lost share from 2020 and has seen a 40% increase in the last year.
The company also has a solid dividend yield of 3.82 percent.
Should You Buy Apartment REITs?
Right now, single-family homes and multifamily housing properties are seeing strong demand.
As the world continues to return to normal, people are more willing to live in bigger cities once again.
This shift has caused apartment and residential REIT stocks to grow significantly over the last year.
With this trend expecting to continue, this could be an excellent time to add some of these REITs to your portfolio.
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