3 Real Estate Stocks to Buy for Terrified Investors

Motley Fool investors shouldn’t be afraid of investing in real estate if they have a long-term growth strategy, but these provide some relief.

Amy Legate-Wolfe

Author Bio

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Her work can also be found at Canada's National Observer, where she writes on the business side of climate action. Before joining Motley Fool Canada, Amy wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband.

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Favorite Investment Quote

“October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published June 24, 2022 12:45 pm EDT

| More on: CGRVITL.UNVRE

Real estate remains one of the most terrifying places for Motley Fool investors to consider right now. That’s both in terms of purchasing a property, and, of course, purchasing shares on the TSX today. But real estate stocks still offer some strong long-term potential.

Today, I’m going to focus in on three real estate stocks that have seen strong performances in the last few years. Further, they offer global diversification. This will allow you to see your portfolio climb back up as soon as the economy recovers.

NorthWest Healthcare REIT

First up, we have NorthWest Healthcare Properties REIT (TSX:NWH.UN). This healthcare real estate investment trust (REIT) offers you exposure to healthcare properties around the world. That portfolio includes properties from Canada and Australia to the Netherlands and now the United States. Further, it invests in office spaces, parking garages, and, of course, hospitals and other healthcare facilities.

Shares are a steal right now, trading at 6.09 times earnings. NorthWest is one of the strong real estate stocks offering growth of 10% over the last five years, even after the downturn. Yet shares are now down 12% year to date, so you can lock in a dividend yield of 6.71% at these levels!

Vanguard FTSE Canadian Capped REIT Index ETF

For those wanting Canadian growth, I would also consider Vanguard FTSE Canadian Capped REIT Index ETF (TSX:VRE). This REIT index exchange-traded fund (ETF) aims to track the broad Canadian real estate equity index, focusing on stock companies that will see strong performance.

It currently offers a yield as well at 3.05%, with shares down 24% as of writing. The ETF has come down quite a bit because of the sinking in the Canadian market surrounding interest rates and housing prices. But this does mean the company is eventually due for a recovery, and that could see new investors achieve massive growth in the years to come.

iShares Global Real Estate Index ETF

Finally, iShares Global Real Estate Index ETF (TSX:CGR) is a strong consideration for those wanting the simply global growth from real estate stocks. The company has exposure to 75 different real estate stocks located all around the world. You can get exposure to the global performance of real estate, which is due for a rebound in countries all over.

You also get a dividend yield of 1.9% from this stock, with shares down 21% as of writing. Those shares are down 5% from where they were five years ago, but up 125% in the last 12 years. So, right now, you can lock in dividends and see shares recover as we get out of this bearish market.

Foolish takeaway

If you’re a new investor, the real estate market can actually be a great place to consider. It’s merely important that you realize all stocks, real estate stocks included, go up and down. It’s hard to see, but it happens to every sector. Just look at the market now.

But the TSX today will recover, as will these stocks. And in fact, they’ll likely see a quicker recovery thank to their global exposure for investors.