2 Top Real Estate Stocks to Buy and Hold for Years

If you’re looking to buy a top real estate stock for your portfolio, these two are some of the best and recently have become much cheaper.

| More on:
Pixelated acronym REIT made from cubes, mosaic pattern

Image source: Getty Images

One of the reasons why real estate is such an excellent industry to invest in is because it’s one of those industries that will be around forever. This makes finding a top real estate stock to buy and hold for years one of the best investment strategies.

Typically, investors think of residential real estate when thinking of investing in the industry. This is due to the defensive nature of residential real estate, as people always need somewhere to live.

However, in addition, there are several other subsectors that are excellent investments today. So if you’re looking to buy a top real estate stock for your portfolio that you can own for years, here are two of the best to consider now.

One of the top residential real estate stocks to buy

If you are more interested in gaining exposure to residential real estate and taking advantage of all the opportunities that real estate investment trusts (REITs) offer, one of the top real estate stocks to buy now, is InterRent REIT (TSX:IIP.UN).

InterRent has been an incredible growth stock over the last decade. And lately, the price of its units have fallen from their highs, offering investors an excellent entry point today.

While the Canadian housing industry has been hot, and that has helped drive InterRent’s growth, the fund’s execution has also been top-notch. InterRent is consistently looking for ways to expand its portfolio, or upgrade the assets it already owns, to grow the value of these suites in addition to the cash flow they can generate.

This is a simple and repeatable strategy that’s earned investors a total return north of 440% over the last decade, or a compounded annual growth rate upwards of 18.3%.

So if you’re looking for a top Canadian real estate stock that you can buy and hold for years, InterRent is currently trading more than 15% off its 52-week high.

A top industrial REIT with major growth potential

Another top Canadian real estate stock to buy after it’s recently pulled back from highs is Granite REIT (TSX:GRT.UN).

Granite REIT is a high-quality industrial REIT that offers both unit price and dividend growth potential. Industrial REITs are some of the best to buy right now, as companies continue to rely on more warehouse space, especially as e-commerce grows.

This is one of the reasons Granite is a top real estate stock to buy today. The fund is already well-positioned for this growth, as more than 60% of its revenue currently comes from e-commerce related warehouses. In addition, Granite is well-diversified, with properties across North America and Europe. In total, it owns 114 income-producing properties, as well as another 12 properties it can develop.

In the past, one of the only knocks against Granite was that it had too much exposure to some companies. However, now, no company makes up more than 24% of its gross leasable area, which has helped to reduce a tonne of risk for investors.

Plus, like InterRent, it’s consistently increasing its distributions. However, Granite’s yield is a bit more attractive, currently sitting upwards of 3.25%. And with the stock having a 78% payout ratio of its adjusted funds from operations, you know that dividend is safe.

So if you’re looking for a top real estate stock to buy now, Granite REIT is one of the best to consider.

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 Daniel Da Costa owns INTERRENT REAL ESTATE INVESTMENT TRUST. The Motley Fool recommends GRANITE REAL ESTATE INVESTMENT TRUST.

More on Stocks for Beginners

Technology
Stocks for Beginners

Starting an Investment Portfolio? Buy These 3 Stocks!

Interested in getting a start in the stock market? Buy these three stocks today!

Read more »

TFSA and coins
Stocks for Beginners

TFSA Investors: 3 Stocks You Should Buy Today

Are you looking for stocks to add to your TFSA? Here are three top stocks to buy today!

Read more »

TIMER SAYING TIME FOR ACTION
Stocks for Beginners

2 High-Growth Stocks to Buy Hand Over Fist This Week

You might not get a better bargain on these two Canadian high-growth stocks if you miss them buying right now.

Read more »

ETF chart stocks
Stocks for Beginners

2 Interesting ETFs to Buy for Passive Investing

ETFs are a simple and low-cost way for investors to invest passively for the long haul. Currently, QQQ and XRE…

Read more »

Stocks for Beginners

Canadians: 3 Ways to Help You Fight High Inflation

No one likes high inflation when it makes a regular basket of goods way more expensive than it was not…

Read more »

protect, safe, trust
Stocks for Beginners

2 Safe TSX Stocks to Buy and Hold for Decades

Newbie investors with low-risk tolerance can buy two safe TSX stocks anytime and keep them for decades.

Read more »

Stocks for Beginners

Where to Find Good News in a Market Pullback

News in a market pullback is often negative. Fortunately, it’s not all bad. There are some great buys right now.

Read more »

data analytics, chart and graph icons with female hands typing on laptop in background
Stocks for Beginners

Got $3,000? 3 Top TSX Stocks to Buy Today

Looking for growth along with dividends? Here are three top TSX stocks.

Read more »