REITs are a Prime Target if You’re Looking for a Dip to Buy

REITs are a Prime Target if You’re Looking for a Dip to Buy

My wife and I just bought a house, so real estate is on my mind this morning. We overcame low inventory, competitive overbidding, rising interest rates, and the bureaucratic inefficiencies of the Commonwealth of Massachusetts. In the end, the price we settled on was lower than the appraisal price, so we scored some equity. It was the toughest $15K I’ve ever earned.

There’s an easier way to make money in real estate, and now is the time to buy into it. Real estate investment trusts (REITs) have bottomed out, just like Bitcoin and many of your favorite tech stocks. You’re buying the dip on those. Why not add some REITs to your portfolio too? I did some research and came up with a few that I believe will be decent earners this year. 

Buying the Dip: Five REITs to Acquire in 2022

  • American Tower (AMT): American Tower, which is a REIT for cell phone towers, peaked at $303 in September last year and has been declining since. They recently acquired CoreSIte Realty, a US data center REIT, which may have caused the dip. In their latest report, Moody’s touted non-cancellable leases and global footprint as strengths. 
  • Digital Realty Trust (DLR): Share prices went down slightly after a Q4 report that showed funds from operations at $1.67 a share, a penny less than the $1.68 Zacks had them estimated at. That number is somewhat misleading. Revenue for DLR hit $1.11 billion for the period, which exceeded the Zacks estimate of $1.1 billion. 
  • Plymouth Industrial REIT (PLYM): This one barely classifies as being in a dip. PLYM peaked at $32 in December, then fell to $26.61 a month later. They opened this morning at $28.05 after announcing a 4.8% increase in their regular quarterly cash dividends. This is a REIT on the rise. Strong buy recommendation. 
  • UMH Properties (UMH): New home inventories for buyers are historically low and interest rates are going up. UMH Properties owns a portfolio of 8,700 rental homes and plans to add another 900 rental homes this year. They also own 3,300 vacant lots and 1,800 acres of undeveloped land, enough for 7,300 new homes. 
  • Stag Industrial (STAG): While everyone is talking about the decline of Big Retail and its effect on commercial property, Stag has invested 40% of its portfolio into eCommerce fulfillment space. Their tenants include Amazon, Eastern Metal Supply, FedEx, and American Tire Distributors. They’ve also increased dividends seven years in a row.  

Real Estate Income and IPO Investment with Fundrise

This isn’t the first time I’ve written about REITs here on Investors Prism. I brought them up in an article we published last March. That piece also profiled the “Fundrise IPO,” which is not really an IPO (yet). It may become one soon, though, so Fundrise is worth mentioning again. Users of the application can still get into the internal IPO for $1,000 investment.

Fundrise is a REIT with options. Investors can choose their managed real estate portfolios and not do anything else, or they can selectively invest in certain real estate projects. Fundrise returned an average of 22.99% per user last year. Public stocks netted 28.71%. I’m not betting on big stock returns for 2022. Real estate seems to have greater profit potential.     

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About the Author

REITs are a Prime Target if You’re Looking for a Dip to Buy

Kevin D. Flynn

Kevin D. Flynn is a former financial professional and founder of AdvisorScale Financial Writing. He lives in Leominster, Massachusetts with his wife Evelyn, two cats, and nine wonderful grandchildren.