It’s a real challenge to find anything to complain about regarding the returns being generated by REITs these days. This is due to the fact that share prices are soaring and REITs returns are up by almost 40% over the past twelve months. Keep reading to learn more about the best apartment and residential REITs that continue to produce the highest dividend yields.
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 buildings and units.
While headquartered in Texas, Camden owns a portfolio of over 165 apartment communities with more than 59,000 apartment units across the United States.
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 has made the list for several years, settling into the number eight spot at the end of 2021.
Share prices have seen a relatively steady climb over the last year, currently sitting just over 50% higher than last year at this time.
Like many other REITs, Camden Property Trust has an excellent dividend yield of 2.25%.
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 nearly 88,000 apartment units in 297 communities.
Their portfolio includes properties in a wide range of cities, including New York City, Washington DC, Seattle, Los Angeles, and San Francisco.
Overall, AvalonBay has buildings in 12 different states across the country.
This diversity can help AvalonBay see profits even if one region of the country is struggling.
The plan seems to be working, as share prices are up 30% over the last year.
In addition, AvalonBay Communities is currently a high dividend yield REIT at 2.59%.
With a strong yield, share prices increasing steadily, and a diverse portfolio, chances are AvalonBay will keep growing over time.
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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.
Invitation Homes specifically seeks out top-quality homes in areas with diverse job pools and good schools.
It is able to boast a nearly 80% resident retention as a result.
Alongside other REITs, Invitation Homes has seen positive growth over the last year.
As opposed to last year at this time, share prices are up 30% overall.
Now seems to be a great time to buy and follow the forward momentum of single-family rental housing into the future.
According to Core Logic’s December report, single-family home rents were up 10.9% year over year and projected to increase in returns for Invitation Homes throughout 2022.
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 55,000 homes across 22 states.
The company focuses on move-in-ready homes in select neighborhoods with good schools.
Many homes come with a list of amenities to incentivize potential renters even more.
Share prices have been flat for the last month, but American Homes 4 Rent is still just under its all-time high.
Momentum throughout 2021 has the stock valued 20% higher than last year at this time.
In fact, the company posted revenues of $338 million from its last quarterly report, an increase of 14% from last year.
Alongside long-term potential, American Homes 4 Rent offers a 1.83% dividend yield.
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.
The company’s real estate portfolio covers much of the West Coast with 250 apartment complexes and 60,500 apartment units.
It also has one retail space for rent in Southern California, the San Francisco Bay area, and Seattle.
After the acquisition of BRE properties in 2014, the company was officially added to the S&P 500.
Thanks to such expansion, Essex now has a market cap of $22.19 billion.
Shares have seen a slow upward crawl throughout 2021, dipping in January 2022 before quickly recovering.
Currently, the company is boasting a 2.58% dividend yield with a share price of just under $350.
All signs point to this stock continuing to grow throughout 2022.
Independence Realty Trust (NYSE: IRT)
Independence Realty Trust is based in Philadelphia, Pennsylvania, owning multifamily properties throughout the United States.
Most of its properties are in growing markets in southeastern United States cities like Atlanta, Raleigh, and Tampa.
A recently completed merger with Steadfast Apartment REIT grew IRT’s portfolio to more than double its previous assets.
Its properties now reach the Midwest, Texas, Oklahoma, and Colorado.
Instead of focusing on newer properties, IRT has balanced its portfolio with a number of older properties that it can renovate.
The company also focuses on acquiring properties with a very stable tenant base, helping it survive even when the market is down.
Share prices have seen a steady rise over the last year, increasing 70% during that time.
Financials look solid as well, with Independence Realty Trust beating estimates for revenue and earnings per share in this last quarter.
Shares currently sit at an all-time high and don’t look to stop moving upward any time soon.
Cheap Apartment REITs
Apartment Investment and Management Company (NYSE: AIV)
Apartment Investment and Management Company is one of the largest apartment-focused REITs in the country.
The company has a very diverse portfolio of properties spanning 13 states across the country and Washington, D.C.
It has properties in both urban and suburban areas, catering to a wide variety of renters.
This diversity helps AIV stay financially successful even in uncertain conditions.
The Apartment Investment and Management Company has seen some ups and downs in share price over the last year but is currently 33.57% higher than in 2021.
Financial numbers look strong with higher than expected revenue and a considerable increase in net income.
The company reported a total occupancy of 97.8% from its latest earnings call, which generated $4.1% more revenue than the previous year.
Stock prices are still at just $7.50 per share, but don’t expect them to stay this low for long.
Equity Residential (NYSE: EQR)
Headquartered in Chicago, Equity Residential is one of the largest apartment REITs in the United States.
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 75,000 units for Equity Residential.
The company’s holdings in many of the largest cities in the U.S. prove to be very profitable ventures and have a 96.6% occupancy rate.
Share prices are moving in the right direction, with a 20% increase year over year.
Equity Residential also gives shareholders a 2.69% dividend yield.
Its revenue stream has been up the last two quarters, beating estimates by a few percent both times.
People are relocating to these urban hotspots, and Equity Residential will be there to greet them.
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 nearly 300 complexes constituting over 101,500 units.
Additionally, Mid-America Apartment Communities owns mixed-use commercial spaces for housing with restaurants, retail, and offices all on-site.
These statistics have placed it firmly on the S&P 500 list.
With only a short dip at the beginning of January, Mid-America Apartment Communities has seen steady gains over the last year.
Share prices sit 40% higher than last year, just under an all-time high.
MAA has also pushed up dividends, with a current yield listed at 2.09%.
Even though it’s not a huge dividend payer, its growth potential is what makes it a real standout buy right now.
Overall, the 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. on 93 different campuses.
All these listings represent 203 unique college communities.
Universities have a new influx of students every year that need housing, which helps keep occupancy rates high.
Shares have moved in the right direction for most of 2021, growing 27% during that time.
The company also has a solid dividend yield of 3.40 percent.
Financial numbers are exceeding expectations, showing the potential for continued success.
Should You Buy Apartment and Residential 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 expected to continue, this could be an excellent time to add some of these REITs to your portfolio.
However, they are not without risks, so it is important to understand the specific attributes of a given REIT before investing.
Where to Buy Apartment and Residential REITs
You’re going to find these REITs on major exchanges, so you’ll need a platform that searches those markets.
Some of the best options to do so are Webull and Robinhood.
The Webull platform is full of features that traders can use to discover hidden gems among stock market noise.
Robinhood is built to be intuitive and simple, making ticker searches a breeze.
If you choose one of these platforms, there are no commission fees for any investments you make.
Best Apartment and Residential REITs: Final Thoughts
Apartment and residential REITs are surging at present, thanks to things around the country returning to normal.
There doesn’t appear to be an end to this momentum in sight, boding well for both companies and traders.
Better yet, nearly all apartment and residential REITs pay a dividend yield to shareholders.
Long-term growth and passive income make for a great investment opportunity.
Apartment and Residential REITs FAQ
Check out answers to some of the most-asked questions regarding apartment and residential REITs.
Are Residential REITs a Good Investment?
Residential REITs can be a good source of both passive and long-term income.
While the condition of the market is always a consideration, these stocks have the potential to pay out for a long time.
Are There Any Residential REITs?
There are a handful of REITs that cater to the residential market.
We’ve captured the best ones currently available in this guide.
Are REITs a Good Investment in 2022?
All signs point to REITs continuing to trend upward as 2022 progresses.
Investing in an apartment or residential REIT looks to be beneficial for gains.
Can You Get Rich Investing in REITs?
It’s certainly possible to get rich investing in REITs, but these types of stocks are usually slow growers.
You’re likely to experience gains and income from dividends, but the rate is usually too slow to get rich in a reasonable amount of time.
Can You Lose Money in REITs?
As with all stocks on the market, there’s certainly a potential to lose money with REITs.
The smart thing is to do your research before any investment to ensure you have the best chances of success.