Relying on REITs
As the quest for passive income intensifies, many investors are turning to real estate as a reliable source of revenue. While traditional rental properties can be lucrative, they often require significant time and effort. Instead, investing in Real Estate Investment Trusts (REITs) offers an easier path to passive income. By owning portfolios of income-generating properties, REITs distribute most of their earnings through dividends, making them an attractive option for investors seeking effortless income streams. This article highlights three top REITs to consider for passive income this June.
Why Invest in REITs?
REITs make real estate investing accessible without the burdens of property management. Here are some compelling reasons to consider REITs:
- High Dividend Yields: Many REITs offer dividends that often exceed traditional stocks.
- Diversification: Investing in REITs allows you to diversify your portfolio with real estate assets.
- Liquidity: Unlike physical properties, REITs can be bought and sold like stocks, providing liquidity.
- Professional Management: REITs are managed by professionals who handle property acquisition and management.
Three Top REITs for June 2025
1. Agree Realty (NYSE: ADC)
Agree Realty specializes in acquiring and developing high-quality retail properties that are net leased to financially strong retailers. The net leasing structure provides a stable cash flow as tenants cover all operating costs, including maintenance and taxes. Notably, 68.3% of Agree Realty's rent comes from tenants with investment-grade credit.
Current metrics include:
- Dividend Yield: Over 4%
- Dividend Growth Rate: 5.5% compound annual growth over the past decade
- Payout Ratio: 72% of adjusted funds from operations (FFO)
With a robust balance sheet and a growing portfolio, Agree Realty is well-positioned to continue increasing its dividends, making it a strong candidate for investors seeking passive income.
2. Prologis (NYSE: PLD)
As one of the largest REITs globally, Prologis focuses on logistics properties leased to high-quality tenants under long-term contracts. These contracts include embedded rental rate escalations, providing steady and growing income streams. Prologis has reaped benefits from the increasing demand for warehouse space, enabling it to sign new leases at elevated market rates.
Key financial highlights include:
- Dividend Yield: Nearly 4%
- Dividend Growth Rate: 13% compound annual growth over the past five years
- Strong Financial Position: One of the best balance sheets in the REIT sector
Prologis is also expanding its portfolio by developing data centers, further enhancing its growth potential and ability to increase dividends.
3. Mid-America Apartment Communities (NYSE: MAA)
Mid-America Apartment Communities is a leading U.S. apartment landlord, owning over 104,000 apartment homes across 16 states, primarily in the burgeoning Sun Belt region. The REIT boasts a history of consistent dividend payments, having paid 125 consecutive quarterly dividends without a suspension or cut.
Current metrics include:
- Dividend Yield: Approximately 4%
- Dividend Stability: Over 30 years of consistent dividend payments
- Development Investments: $657.3 million in seven properties currently in lease-up phase
With plans for further developments and upgrades to existing units, Mid-America Apartment Communities is likely to continue its streak of dividend growth, making it an appealing option for investors.
Conclusion
Investing in REITs offers a straightforward pathway to earning passive income through real estate without the hassles of property management. Agree Realty, Prologis, and Mid-America Apartment Communities stand out this June for their solid financial positions, strong dividend yields, and growth potential. Investors looking for a reliable source of passive income should consider adding these REITs to their portfolios.
For more insights on the best investment strategies, visit Inside Ticker.