Become a Landlord by Investing in Boardwalk Real Estate Investment Trust

Investors looking for a strong monthly distribution from a residential-focused REIT should consider investing in Boardwalk REIT (TSX:BEI.UN).

| More on:
The Motley Fool

Real estate investment trusts (REIT) are gaining in popularity lately as viable investment options. With markets still jittery about the outcome of the Brexit vote, investors have been seeking shelter in more traditional areas, specifically, precious metals.

While gold may be rallying at the moment, providing your portfolio with something shiny, there really are limited growth prospects by hoarding physical gold. You can’t actually pay your rent or utility bills with a bar of gold bullion, now can you?

Fortunately, there is hope. Those investors who are looking for an investment that pays a great dividend and has growth prospects should consider a REIT such as Boardwalk REIT (TSX:BEI.UN).

REITs allow investors to get as close to becoming a landlord as they can without the headaches of being a property owner. Even better, distributions from the properties are typically paid on a monthly basis, meaning investors get their monthly rent cheques, just like a landlord does.

Boardwalk is great for investors

Boardwalk primarily deals with residential properties, having nearly 33,000 properties scattered across Ontario, Quebec, Alberta, and Saskatchewan. Most of those properties are mid- to large-sized suburban and downtown apartment buildings and community residential centres in urban markets.

In terms of how Boardwalk is currently doing, the company is trading at $56.52, up by an impressive 19% year-to-date. Looking out over a longer period of time shows a steady growth, averaging just over 10% per year over the past decade. In terms of the monthly distribution, Boardwalk pays out $0.19 per share monthly, giving the stock a very handsome yield of 3.98%

To put all of that into perspective, over the course of a decade, that would be 120 distributions at a great rate and another 10% growth per year on your initial investment price. Not bad.

Boardwalk is actively growing and retaining tenants

One thing that’s impressive about Boardwalk is that it’s not sitting on its laurels and collecting revenues. The company is seeking out new growth opportunities and new developments wherever they may arise that will add to its bottom line. Even more impressive is the fact that Boardwalk is able to capitalize on the weakened state of the economy to acquire new assets.

Boardwalk recently announced the acquisition of a Calgary-based 238 unit community called Auburn Landing. The community consists of one- and two-bedroom units, totaling more than 205,000 square feet of space that will add to Boardwalk’s already impressive portfolio that–as of the last quarter–boasted a 97% occupancy rate. There’s good reason for occupancy being that high as management has made it a goal to make the properties that Boardwalk owns and manages good places to live.

Additionally, the company struck deals with various companies in the past to give residents discounted deals on internet and phone services. Given the stellar occupancy rate, the strategy seems to be working, even when considering that a huge chunk of the company’s properties lie in Alberta, which has been experiencing weakness in its economy.

In my opinion, investors looking for a REIT company that is primarily invested in residential properties will be more than pleased with an investment in Boardwalk.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Demetris Afxentiou has no position in any stocks mentioned.

More on Investing

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

young woman celebrating a victory while working with mobile phone in the office
Investing

3 Roaring Stocks to Hold for the Next 20 Years

These top TSX stocks are excellent long-term buys, given their multi-year growth potential and solid underlying businesses.

Read more »

Two seniors float in a pool.
Dividend Stocks

TFSA: How to Earn $1,890 in Annual Tax-Free Income

Plunk these investments into your TFSA to earn passive income and avoid the taxman.

Read more »

grow dividends
Investing

Here’s My Top 3 TSX Stocks to Buy Right Now

Even though the TSX has been rising, there are still some good bargains out there. Here are three top compounding…

Read more »

Target. Stand out from the crowd
Investing

Prediction: This Canadian Growth Stock Could Double by 2030

Alimentation Couche-Tard (TSX:ATD) is a top growth stock that could do well over the next six or so years.

Read more »

Businessman holding AI cloud
Tech Stocks

Could Investing $20,000 in Nvidia Make You a Millionaire?

Nvidia stock has made investors millionaires in the last 10 years. Is it too late to invest to become a…

Read more »

Engineers walk through a facility.
Dividend Stocks

1 TSX Stock I Wouldn’t Touch With a 10-Foot Pole

AtkinsRéalis (TSX:ATRL) is one TSX stock I'd never invest in.

Read more »

money cash dividends
Stocks for Beginners

Have $500? 3 Absurdly Cheap Stocks Long-Term Investors Should Buy Right Now

If you're looking for cheap stocks, these three have a huge future ahead of them, all while costing far less…

Read more »