Real estate is one of those industries that every investor should have in their portfolios. The industry, especially residential real estate, is one of the most defensive investments you can make. That’s why owning income-generating properties is such a popular investment for so many Canadians.
While income properties can be great investments, real estate stocks offer a lot of benefits to consider. Investors can gain exposure to a portfolio of high-quality assets. They offer significant diversification and access to real estate projects with major potential.
Real estate stocks are also a lot less time-consuming. Investors will still have to do a lot of research before making the investment and keep up to date with business developments. However, they’re a lot less work than owning your own income property.
There are several high-quality real estate stocks, depending on what kind of investor you are. Here are three of the top Canadian real estate stocks to buy today.
A top residential real estate stock
If you’re interested in residential real estate, one of the top Canadian stocks to consider is InterRent REIT (TSX:IIP.UN).
Over the last decade, InterRent has been one of the top growth stocks in Canada, let alone the real estate industry. It’s gained over 1,100% in the last decade, showing just good management is.
The company’s main business model consists of buying older properties to renovate them inside and out, ultimately increasing the value substantially. This not only grows shareholder value, but it allows the company to charge higher rents on these improved units.
In just the last 10 years, revenues have grown by over 350%. This is a combination of higher rental rates and more acquisitions by the company.
The pandemic has somewhat delayed the top Canadian real estate stock’s growth in the short term. However, long term, nothing’s changed.
So, if you’re looking for an incredible residential real estate investment, InterRent is a top choice.
An attractive value stock
InterRent is a great choice for growth investors or those who want exposure to the residential real estate industry. If you’re looking for more a value stock to buy, consider First Capital REIT (TSX:FCR.UN).
First Capital owns a high-quality portfolio of mixed-use real estate. Its residential real estate has been understandably resilient. It’s the retail real estate that’s been most impacted, which has caused First Capital to trade at a significant discount.
These are only short-term issues, though. First Capital still owns one of the highest-quality portfolios of real estate assets in Canada.
So, over the next few years, as the economy fully rebounds, you can expect the stock to make a full recovery, rewarding long-term investors willing to take a position today.
The stock has already begun its recovery, though. So, I wouldn’t wait too long to take a position, or you could miss out on the recovery altogether.
Industrial real estate stock
Lastly, one of the top real estate stocks to buy for the long term is Granite REIT (TSX:GRT.UN). Granite is a rapidly growing industrial REIT.
Industrial real estate stocks offer investors incredible long-term growth potential, especially with the growth in e-commerce. This makes Granite a great hedge if you own other retail real estate stocks.
As companies decide to go online only, the need for warehouse space is rising rapidly. In the past, brick-and-mortar stores could hold much of these companies’ inventory. Today, though, more companies are needing warehouses to store their inventory.
This is resulting in stocks like Granite seeing massive increases in business. In just the last three years, the REIT has gained roughly 80%. And as it continues to make new acquisitions and expand its operations, its potential only continues to grow.
So, if you’re looking for a high-quality growth investment, Granite is one of the top real estate stocks you can buy today.
