Nowadays, it’s not easy to find a safe stock that pays out much better than 1%, but I’ve found a business that yields three times more than your average company.
This unique firm owns hundreds of apartment buildings across the country. This is how it has been able to deliver so much cash to unitholders. Even better, it pays investors monthly, so you don’t have to wait to start cashing in.
However, if you want to start collecting these consistent, oversized rent cheques, then you have to act fast. The next round of distributions are scheduled to be mailed out soon. To be eligible, you must take action by Friday, March 27.
Collect up to $1,200 in monthly income without becoming a landlord
Owning rental properties is a great business. You buy a few houses, love your tenants, and pay off the mortgages. In 20 years or less, you will have built a legacy of wealth that can last generations.
But owning real estate is not for everybody. There are a lot of hassles—mowing lawns, collecting security deposits, and chasing down late payments. Not to mention the worry of tenants destroying your property. Sure, we could all use the extra money, but becoming a landlord isn’t easy. That’s why you might be interested to learn about a way to collect monthly rental income without buying properties yourself.
I’m talking about investing in an established, well-diversified landlord—Boardwalk REIT (TSX:BEI.UN). Here’s why this trust deserves a spot in your portfolio.
Real estate loves inflation. Think about all of the physical things that go into a new building: lumber, bricks, nails, wiring, pipes, fixtures. And don’t forget about paying contractors, architects, and engineers. Do you think these components will cost more in the years to come? Of course they will.
In the future, constructing new buildings will be more expensive. This gradual inflation will pull up values for existing properties. Through Boardwalk, you will own a share in these existing buildings. Your property values will increase. Your rents will increase.
Now, owning Boardwalk won’t make you the talk of your next cocktail party. That’s because the trust’s portfolio consists of regular old apartment buildings across Canada. However, what I love about these assets is that they will continue to generate cash, even if the rest of the economy struggles.
You can almost think of Boardwalk as the Dollarama of housing. Dollar stores sell household staples and people don’t stop shopping there when business tanks. Boardwalk is the same idea, except in real estate. Sure, it’s nothing fancy, but people will always need to have a roof over their head.
For unitholders, this has translated into dependable income. Since 2004, long-time partners have collected 122 consecutive rent cheques. Today, Boardwalk pays investors an annual distribution of $2.04 per unit, which comes out to a yield of 3.5%.
Earn monthly rental income starting April 15
Boardwalk is a compelling alternative to owning real estate yourself. There’s no maintenance or upkeep; a professional management team handles all of the daily operations.
Starting with a $42,000 investment, you can earn an extra $120 per month in distributions. If you invest $420,000 (about the cost of buying your own rental property), then you can collect $1,200 in monthly income.
The next round of distributions are scheduled to be mailed out in a few weeks. So, if you become a partner by March 27, you’ll be eligible to collect your first rent cheque on April 15.
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Fool contributor Robert Baillieul has no position in any stocks mentioned.