7x Best REITs 2025: High Dividend and Quality Real Estate Investment Trusts

DV
23 november 2024

The Best REITs for 2025: Investing in Real Estate with High Dividends and Returns

Real estate investments through REITs (Real Estate Investment Trusts) are an attractive option for investors looking for stable income and potential stock price returns. In this article, we discuss six of the best REITs for 2025, focusing on dividends, undervaluation and long-term growth potential. Investing in the best REITs is very attractive right now because of their share price potential. Not only do these best real estate funds pay high dividends. They also offer share price potential because of recent share price declines. As a result, REITs' valuations are historically undervalued. The last time stock prices fell to this level was a very long time ago. Therefore, REITs can also be interesting Value stocks right now.


What are REITs and why invest in real estate funds?

REITs are publicly traded real estate funds that invest in properties such as shopping centers, homes, offices or specialized niches such as gaming and entertainment. These funds often pay high dividends (4-6% or more), making them ideal for investors seeking passive income. In addition, REITs offer access to real estate without having to manage properties yourself.

A nice benefit to REITs is diversification on your investment portfolio. It's a risk diversification on investing in stocks. And it can be a strong complement to dividend stocks of companies. Or conversely, to bolster your ETF portfolio. But of course, there are drawbacks to REITs, too.


6x the best REITs right now with quality and dividends

1. Realty Income (O): Quality with Attractive Dividend

Realty Income, also known as “The Monthly Dividend Company,” is one of the most popular and best REITs thanks to its stable monthly dividend and solid historical performance. After a recent decline of around 10-12%, the REIT is once again attractively priced. With a dividend yield of around 4.5% and proven stability, Realty Income offers a mix of security and growth potential.

The valuation is currently lower than the historical average, making it an interesting entry point. Based on historical patterns and projections, Realty Income could achieve annual total returns in excess of 20%, including dividends. It is an excellent choice for investors seeking a safe haven within the real estate market.

As a Real Estate Investment Trust, Realty Income (O) is also suitable for novice investors. They manage a strong real estate portfolio. Long-term growth is more limited, but results can be more stable. Still, it is good to put together a solid REIT portfolio to mitigate individual risk.


2. National Retail Properties (NNN): Consistent Dividend and Valuation.

National Retail Properties focuses on free-standing retail real estate. Despite recent declines of about 11%, the fund remains attractive thanks to a dividend yield of about 5%. With an undervaluation relative to the sector and a favorable Price-to-AFFO ratio, this REIT offers both stability and potential price return. Although the growth potential is slightly lower than other REITs, the predictability of dividend payments is a major plus. For investors looking for passive income with limited volatility, NNN is a reliable choice.


3. VICI Properties: Entertainment and Growth

VICI Properties focuses on unique segments such as gaming and entertainment. The fund has performed impressively in recent years and remains attractive because of a dividend yield of more than 5%. Recent declines make it an interesting time to enter, especially since factor analysis indicates a Strong Buy. With a low valuation and strong profitability, VICI Properties scores high on growth potential. Analysts expect this REIT to achieve total returns in excess of 14-20% by 2025, including dividends. For those looking to invest in real estate with a twist, VICI offers an attractive prospect.


4. Agree Realty Corporation (ADC): Premium Real Estate with Stable Performance.

Agree Realty is a high-quality REIT focused on retail real estate. After rising 37% in 2024, the valuation seems a bit high, but the 4% dividend yield remains stable and attractive. The fund offers high-quality profitability, making it a safe choice for investors who prioritize quality. Although growth potential is limited, Agree Realty can be a stable addition in a diversified real estate portfolio. It is of particular interest to investors seeking long-term security combined with a consistent dividend.


5. Simon Property Group (SPG): Big Player with Limited Potential.

Simon Property Group is one of the largest REITs in the world, with a focus on shopping centers and retail. The 4% dividend yield is solid, but the growth potential is less attractive because of the fund's size. The valuation is currently reasonable but not undervalued, which limits upside potential. For investors who seek diversification and value stability, Simon Property Group may be a good choice. The fund is less suitable for those expecting high returns, but it does offer predictability and reliability.


6. Mid-America Apartment Communities (MAA).

Mid-America Apartment Communities (MAA) is one of the best REITs focused on apartment communities in the southern and southeastern United States. The fund benefits from growing demand for rental housing in these regions, which are experiencing strong population growth and economic expansion.

MAA's dividend yield is solid and attractive to investors seeking passive income. While the dividend is not as high as other REITs in the list, it is supported by a stable financial base and long-term demand for rental housing.

Mid-America Apartment Communities is a solid REIT in the rental housing segment, with a stable income stream and dividend payout. It also has attractive growth potential compared to other REITs in the video. It remains an interesting choice for investors looking to benefit from the growth in the rental housing market in the US.


Why invest in REITs before 2025?

After recent price declines, many REITs are attractively priced, making this a good entry point. In addition to price potential, these funds offer stable and high dividends, making them ideal for both growth- and income-oriented investors. The REITs discussed all have strong fundamentals, low valuations and proven stability.


How do you choose the right REIT?

When selecting a REIT, it is important to consider:

  • Dividend yield: How consistent and high is the dividend paid?
  • Valuation: Is the fund undervalued relative to the industry?
  • Growth: What is the potential for long-term capital appreciation?
  • Sector focus: Choose a sector that matches your risk appetite and vision.
  • Quality: Is it a high-quality real estate fund. Think high tenant fill rate, excellent property locations, strong management, etc.

With REITs like Realty Income, VICI Properties and Agree Realty Corporation, you can benefit from stable dividends and potential capital gains. Start investing in real estate through REITs and build your financial future with passive income and growth opportunities!