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!

Pixelated acronym REIT made from cubes, mosaic pattern

Image source: Getty Images

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.

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 Amy Legate-Wolfe has positions in NORTHWEST HEALTHCARE PPTYS REIT UNITS. The Motley Fool has positions in and recommends AUTOMOTIVE PROPERTIES REIT. The Motley Fool recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

growing plant shoots on stacked coins
Dividend Stocks

4 Ways to Grow $100,000 Into $1 Million in Retirement Savings

Anyone can build a million-dollar retirement portfolio. Here are four ways you could practically grow $100,000 to $1 million.

Read more »

A shopper makes purchases from an online store.
Dividend Stocks

3 Reasons to Buy TFI Stock Like There’s No Tomorrow

TFI stock (TSX:TFII) had a hard 2023, but now it's set up for a solid 2024, with an acquisition that…

Read more »

IMAGE OF A NOTEBOOK WITH TFSA WRITTEN ON IT
Dividend Stocks

5 Secrets of TFSA Millionaires

These lesser-known secrets can help you set up the perfect long-term portfolio and achieve a million-dollar TFSA!

Read more »

analyze data
Dividend Stocks

How to Build a Powerful Passive-Income Portfolio With Just $20,000

These fundamentally strong TSX stocks have paid and increased their dividend in all market conditions. Add these stocks to build…

Read more »

Canadian stocks are rising
Dividend Stocks

iShares S&P/TSX Capped REIT Index ETF (TSX:XRE): Why I Like this ETF Better Than a Rental Property

XRE is a great ETF for gaining exposure to the Canadian real estate sector.

Read more »

Payday ringed on a calendar
Dividend Stocks

3 High-Yield Dividend Stocks That Pay Cash Every Month

These three dividend stocks all offer high yields and have sustainable dividends, making them some of the best investments to…

Read more »

Silver coins fall into a piggy bank.
Dividend Stocks

3 Stocks That Could Create Lasting Generational Wealth

If you want to start transferring over your wealth, you'll need to actually have some! And these are three stocks…

Read more »

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

Down by 25%: Is Canadian Tire Stock a Buy in February 2024?

Take a closer look at this Canadian retail stock if you are looking for low-cost additions to your self-directed portfolio…

Read more »