Some folks believe that taking on mortgages and managing property is the path to financial freedom. Personally, I would rather take on less risk, put in less effort, and achieve a better return.
It just so happens that real estate investment trusts, or REITs, allow investors to benefit from the lucrative world of property ownership without the headaches of doing it themselves. Also, as we will explore in this article, REIT investors can collect huge monthly income from these high-yielding stocks while still having the opportunity for capital appreciation.
From highest to lowest yield, here are seven hot REITs with yields over 7%.
Healthcare real estate promises to be an enormously lucrative investment as the population ages, and Invesque is uniquely positioned to take advantage of this trend. The company currently operates 100 properties with a total value of around US$1.4 billion.
Trading at a discount to book value and offering a yield of nearly 10.5%, Invesque is the highest-yielding stock of the group.
Slate Retail REIT (TSX:SRT.UN)
100% of Slate’s shopping centres are located in the United States and they are all anchored by grocery stores. With 85 properties valued at roughly US$1.3 billion, the company is geographically diversified and has an occupancy rate of about 95%.
Slate has a forward price-to-earnings multiple of around seven and offers a tantalizing yield of almost 9%.
True North Commercial REIT (TSX:TNT.UN)
With an emphasis on government and credit-rated tenants, True North is an office REIT that strives to build a rock-solid tenant base with minimal turnover. The company’s 46 properties boast an impressive 97% occupancy rate and have a combined value of close to $1 billion.
True North trades at just about book value, with a price-to-earnings multiple of approximately eight and a generous yield of around 8.9%.
BTB REIT (TSX:BTB.UN)
Just about evenly diversified across office, retail, and industrial asset types, BTB is a Quebec-weighted REIT with close to 75% of its leasable square footage located in the province. The company has around 75 properties in total with a total asset value of about $800 million.
BTB trades at a slight discount to book value and only six times earnings, all while offering a superb yield of nigh on 8.7%.
Inovalis REIT (TSX:INO.UN)
Investors who wish to diversify away from North American real estate can do so with Inovalis, which is focused on property in Germany and the Greater Paris Region. Externally managed by Inovalis SA, the company benefits from the real estate and financial expertise of a much larger operator with nearly $10 billion in assets under management.
Inovalis yields not far from 8.1% and has attractive valuation metrics, trading at a price-to-earnings multiple of about 11 and a price-to-book ratio of around 0.8.
Morguard REIT (TSX:MRT.UN)
With a $3 billion real estate portfolio of 49 properties, Morguard REIT is largely focused on office properties and regional shopping malls.
The company trades at only half of its book value and a price-to-earnings multiple of about 10. Morguard REIT yields a little more than 7.7%.
Automotive Properties REIT (TSX:APR.UN)
Consolidating auto dealership properties is the mission of APR, which went public in 2015. The company’s 55 properties are diversified across various Canadian provinces and add up to a value of over $750 million.
APR is the lowest-yielding REIT of the group but still delivers an impressive 7.5%, all while trading at an earnings multiple of around nine.