Got $500? These 3 REITs Are Perfect Passive-Income Machines

These three REITs are safe options for Motley Fool investors who want passive income coming in for life — all at a cheap price!

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. Social Media Follow Amy on LinkedIn and Canada Stock Digest. 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 July 12, 2022 3:15 pm EDT

If you’re one of many Motley Fool investors seeking out passive income, then it’s likely you’ve come across real estate investment trusts (REITs) before. REITs provide investors with passive income in most cases on the TSX today. And what’s more, many trade for significant value!

However, not all are the same. And given the rise in inflation and interest rates, I’m sure you want to make every dollar count. So, if you just have $500 to invest, these are the three REITs I would recommend for safe passive income.

CAPREIT

First up, Motley Fool investors should look into Canadian Apartment Properties REIT (TSX: CAR.UN). CAPREIT owns tens of thousands of suites across Canada and the Netherlands and manages them as well in those countries along with Ireland. The rise in home prices has led many to seek out rentals, and this is unlikely to change in the years to come.

In that light, this is a solid long-term investment that could make your $500 go far. Plus, CAPREIT is cheap right now trading at just 5.76 times earnings and shares down 25%! So, today you can lock in a 3.29% dividend yield and have stable passive income on the TSX today.

Automotive Properties

Another strong option for Motley Fool investors is Automotive Properties REIT (TSX: APR.UN). This company focuses on acquiring — you guessed it — automotive properties. But there’s a reason that’s great. This means you get a diversified set of revenue from every type of automotive manufacturer. Further, as the world shifts towards electric vehicles, there could be a huge opportunity for growth.

And yet again, shares of this company with a strong balance sheet trades at just 5.62 times earnings. Shares are down 11.5%, offering a great time to jump in. Motley Fool investors then lock in an incredible 6.3% dividend yield when they buy on the TSX today. That’s some stellar passive income at an incredible price.

NorthWest Healthcare Properties

Finally, the last recommendation I’d give to Motley Fool investors seeking passive income is NorthWest Healthcare Properties REIT (TSX:NWH.UN). NorthWest owns a massive portfolio of diverse healthcare real estate around the world. From Australia to the United States, you can look forward to a stable cash flow coming from long lease agreements, and high occupancy rates.

But shares of the company have dropped in this selloff by about 7.25% as of writing year to date. It now trades at just 6.85 times earnings and offers an incredible dividend yield of 6.44%. You can rest easy at night knowing your $500 will continue climbing at a steady rate thanks to this company’s chosen real estate sector.

Bottom line

If you were to put $500 towards each of these stocks on the TSX today, here’s how it would shake out. You would receive $16 from CAPREIT, $31 from Automotive Properties, and $32 from NorthWest. That’s $79 in passive income that you can add to or keep in your pocket during this downturn.