Canadian investors seeking out long-term passive income need to look in the right place. That is why today I’m focusing on real estate stocks. Rather that look for companies that could ebb and flow with the market, investing in the right real estate stock could set you up for life-long income.
This comes from two avenues. Of course, there’s the share growth that can happen from these companies. However, real estate stocks usually also offer dividends. Combined, investors can use this passive income to fund their future dreams decades down the line.
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Brookfield Asset Management
Brookfield Asset Management (TSX:BAM.A)(NYSE: BAM) owns a diversified range of real estate properties around the world. It’s one of the real estate stocks as well that’s been around for over 100 years, investing in everything from hotels to energy infrastructure.
Despite not having a super-high dividend yield at 1.08%, or a cheap share price trading at 22.39 times earnings, this is still a strong stock to buy. Long-term investors, in fact, have done quite well. If you had purchased Brookfield 20 years ago with $10,000, today, those shares are up 2,095%! That would turn that original $10,000 into $167,500 today! Plus, you’ll be receiving $1,800 in annual passive income.
Alimentation Couche-Tard
Alimentation Couche-Tard (TSX: ATD) is another strong option, as it too offers diverse income from around the world. The company is known in Canada for its Circle K brand but has acquired businesses across Europe, the United States, and beyond as well. Plus, it offers investors income from a variety of sources. There’s its gas bar, retail services, convenience stores, and these are all services that will only expand as the years go on.
So, even with a 0.75% dividend yield and trading at 18.15 times earnings, it’s still one of the real estate stocks I’d consider. Again, it’s been around a long time. If you had invested in Alimentation stock back in 2002 with $10,000, it would have grown 3,965% by now! That’s worth $300,000 today, with passive income of $2,200 per year!
Storage Vault
Finally, storage is another area of real estate stocks that simply won’t be leaving anytime soon — especially in this new world of small business owners. Those wanting to store their smaller number of products at a cheap price need storage units. That’s on top of the stable income from divorce, downsizing, death, and dislocation.
Yet Storage Vault Canada (TSX: SVI) remains an elusive stock among real estate stocks. It’s been growing steadily but remains incredibly cheap, trading at under $6.50 as of writing. Again, it has a very small yield at 0.17% and perhaps not as much history. But even still, that history is strong with shares climbing 3,207% in the last decade along. That would mean a $10,000 investment in 2012 would be worth $307,143 today! Even that gives you a dividend of $477 per year today.
Bottom line
Real estate stocks can give you significant passive income for long-term investors, whether through shares, passive income, or a combination of both. But it depends on where you invest. In the case of these three real estate stocks, investors have a strong history to look back on and a solid path to growth in the years to come.
