The Best Real Estate Stocks to Buy
Now, before we get into the top real estate stocks, it’s important to note that investing in real estate stocks isn’t the best way to build your wealth. Real estate stocks typically don’t keep up with the S&P 500. Sure, some real estate stocks do but most do not.
The question is, why is that?
Example 1: Real Estate Business
A real estate business typically has one revenue stream, that being revenue from rent. If you have a multi-family complex with 100 units and you charge $1,000 per month, the most money you can make is $100,000 per month. That’s decent revenue but it doesn’t compare to a business with multiple revenue streams. One of the most popular Real Estate stocks is Realty Income Corporation (O) and their annual revenue is about $4B.
Example 2: Multinational Corporation
In this example, let’s look at Microsoft. Microsoft has a lot of revenue streams including Office 365, Dynamics 365, Windows Operating System, Surface, LinkedIn, Bing, Xbox, OpenAI, and more. Microsoft has also purchased over 200 other businesses which have turned into new products and revenue streams. Their annual revenue is now over $245B.
As you can see, real estate does not compare to a multinational corporation with multiple revenue streams.
Now, if you’re still interested in real estate stocks, we put together a list of the top real estate stocks but keep in mind, that there are better ways to build your wealth in the stock market.
Why Buy Real Estate Stocks?
There are a few good reasons to buy real estate stocks:
- Dividends: Some real estate companies pay dividends.
- Diversification: Investing in real estate stocks helps diversify your portfolio.
- Less Hassle Than Direct Real Estate: Who likes fixing toilets and changing lights? No one. Well, if you want to own real estate without the hassle of managing a property, buying real estate in the stock market is an option.
How to Choose the Best Real Estate Stocks to Buy
When looking for the best real estate stocks to buy, consider these factors:
- Company Performance: Look at how well the company has performed in the past. Check its profits and growth.
- Dividends: Check if the company pays dividends. Higher dividends can mean more income for you.
- Management Team: A strong management team can lead to a successful company. Research the leaders of the company.
- Valuation: Make sure the stock price is reasonable. You want to pay a fair price for the stock.
The 8 Best Real Estate Stocks to Buy
Here are eight of the best real estate stocks to buy right now:
1. Realty Income Corporation (O)
Realty Income is a company known for giving its investors reliable monthly payments. It’s part of the S&P 500 and operates as a Real Estate Investment Trust (REIT). This means it earns money from over 6,500 properties it rents out to businesses with long-term leases. For 52 years, the company has consistently paid out monthly dividends to its stockholders and has increased the dividend 109 times since it became publicly traded in 1994. It’s also part of a group called the S&P 500 Dividend Aristocrats, which includes companies with a strong track record of paying dividends. You can find more information on their website at www.realtyincome.com.
Realty Income Corporation (O) Tykr Rating
- Summary: Watch
- Score: 50
- MOS: 1%
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2. Prologis, Inc. (PLD)
Prologis is a leading logistics real estate company. It owns warehouses and distribution centers. With the growth of online shopping, Prologis is in a strong position. This makes it one of the best real estate stocks to buy for future growth. Investors believe Prologis will continue to perform well as e-commerce expands.
Prologis, Inc. (PLD) Tykr Rating
- Summary: Watch
- Score: 72
- MOS: 1%
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3. Simon Property Group (SPG)
Simon Property Group is a top retail real estate stock. It owns many shopping malls and retail spaces. Even though retail has faced some challenges, Simon has a strong portfolio and can adapt to changes in the market. This adaptability makes it a good choice among the best real estate stocks to buy.
Simon Property Group (SPG) Tykr Rating
- Summary: Watch
- Score: 50
- MOS: 1%
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4. American Tower Corporation (AMT)
American Tower is a unique real estate stock. It owns cell towers and communication sites. As mobile technology grows, so does the need for more towers. This makes American Tower one of the best real estate stocks to buy if you are looking for growth in the tech sector.
American Tower Corporation (AMT) Tykr Rating
- Summary: Watch
- Score: 56
- MOS: 1%
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5. AvalonBay Communities, Inc. (AVB)
AvalonBay focuses on residential properties. It develops and manages apartments in high-demand areas. With the rising demand for housing, AvalonBay has good potential. This makes it one of the best real estate stocks to buy for those interested in residential investments.
AvalonBay Communities, Inc. (AVB) Tykr Rating
- Summary: Overpriced
- Score: 44
- MOS: 1%
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6. Digital Realty Trust, Inc. (DLR)
Digital Realty specializes in data centers. As more businesses move to the cloud, the need for data centers increases. This makes Digital Realty a great investment choice. It is one of the best real estate stocks to buy if you want to invest in technology-driven real estate.
Digital Realty Trust, Inc. (DLR) Tykr Rating
- Summary: Watch
- Score: 72
- MOS: 15%
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7. Equity Residential (EQR)
Equity Residential is another strong player in residential real estate. It focuses on high-quality apartments in major cities. With urban living trends on the rise, this stock can perform well. Equity Residential is definitely among the best real estate stocks to buy for those looking to invest in urban areas.
Equity Residential (EQR) Tykr Rating
- Summary: Watch
- Score:50
- MOS: 1%
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8. Ventas, Inc. (VTR)
Ventas is a real estate investment trust (REIT) that focuses on healthcare properties. It owns senior living communities, medical offices, and hospitals. With an aging population, the demand for healthcare real estate is expected to grow. This makes Ventas one of the best real estate stocks to buy for investors looking for stability and long-term growth.
Ventas, Inc. (VTR) Tykr Rating
- Summary: Watch
- Score: 61
- MOS: 1%
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Tips for Investing in Real Estate Stocks
If you want to invest in the best real estate stocks to buy, keep these tips in mind:
- Do Your Research: Always research before buying a stock. Look into the company’s financial health and market position.
- Invest for the Long Term: Real estate stocks can be volatile in the short term. Think long-term for better results.
- Watch Market Trends: Stay informed about the real estate market. Changes can affect your investments.
Conclusion: The Best Real Estate Stocks to Buy
In summary, investing in real estate stocks can be a great way to generate income from dividends and diversify your portfolio. However, they will not build your wealth as fast as multinational corporations. In other words, they won’t build your wealth as fast as large companies that sell to customers all over the world.
Typically, you will make more money in real estate by investing private. In other words, investing in single-family, multi-family, or syndicate real estate opportunities.
If you want to find large corporations that can build your wealth much faster, we recommend you log into Tykr and look for On Sale stocks with a 4M score of 80 or higher.