REIT Investors: Create Long-Term Monthly Income With This Diversified, Global REIT

Investing in the right REIT could give you thousands in annual income on top of share growth you can expect for decades.

| More on:

Image source: Getty Images

Real estate investment trusts (REIT) are some of the best ways for investors to make long-term income. True, you certainly want to find REITs that offer share growth as well. But having that passive income on hand means you can look forward to a specific amount of cash on a consistent basis, just like a paycheque.

What to look for

Now, of course, not all REITs are the same. If you want a strong REIT that’s going to be here a decade or more from now, you want to look at the industry it’s in. For example, right now, office spaces and residential properties are not doing so well. Furthermore, many are focused just on Canada. So, you want to find a company that offers diversified investments. That includes in terms of the types of properties they own, along with where they own them.

You’ll also want to look at the sector, and that means finding a company that won’t become obsolete or have a major shift in the decades to come. Some great options in the past have included energy infrastructure, but even this is changing. But if there’s one type of property that simply will never go away, it’s health care.

NorthWest REIT

That’s why I’m recommending NorthWest Healthcare Properties REIT (TSX:NWH.UN). This REIT is a great buy, as it checks all the boxes. NorthWest stock offers monthly passive income that continues to rise. It holds a diverse range of healthcare properties — everything from hospitals to office spaces and parking garages. And, of course, these are located all around the world from Australia to the United States.

The REIT continues to expand as well, which is why its passive income has remained stable, but hasn’t grown. And, frankly, I’m all for it at this point. NorthWest stock has been growing through acquisitions, and purchases of property that continue to expand its footprint. When it’s done, I’m fairly confident it will continue paying back investors in passive income now and in the next decade and beyond.

Create a substantial amount of passive income

So, how much passive income are we talking here? Even though NorthWest hasn’t risen its dividend, it still offers a yield of 6.14% as of writing. Shares trade at $13.15 as of writing, and it trades at just 7.43 times earnings. The business itself has a strong balance sheet, with its average lease at 14.1 years! That’s significant long-term income that both the company and investors can eat up — especially with occupancy at an astounding 97%.

Let’s say you were an investor then that had $10,000 to put towards this REIT. Right now, that would create passive income of $615 per year! That comes out to about $51 per month. Have more to invest? A $50,000 investment would bring in an astounding $3,077, or $256 per month! Meanwhile, shares have grown 150% since coming on the market in 2015. That’s a compound annual growth rate of 13.43%.

Bottom line

Investors seeking out REIT stocks should definitely be careful what they choose right now. NorthWest stock offers you significant long-term income from diversified sources all around the world. You could bring in thousands each year and be happy holding it for decades. And you can get the cash handed out each and every month.

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 recommends NORTHWEST HEALTHCARE PPTYS REIT UNITS.

More on Dividend Stocks

grow dividends
Dividend Stocks

1 Cheap Stock to Turn a $20,000 TFSA Into $267,000

If you're looking to boost your TFSA, you need a cheap stock that you can hold for decades. And I…

Read more »

edit Person using calculator next to charts and graphs
Dividend Stocks

2 of the Best Monthly Passive-Income Stocks to Buy in Canada Right Now

Here are two of the best Canadian monthly passive income stocks you can consider buying right now to hold for…

Read more »

stock analysis
Dividend Stocks

3 TSX Stocks I Will “Never” Sell

Few companies offer a powerful enough combination of dividends and growth potential to deserve a permanent place in your portfolio.

Read more »

value for money
Dividend Stocks

2 Cheap TSX Stocks for TFSA and RRSP Investors to Buy Now

These stocks look attractive today to buy for a TFSA or RRSP portfolio.

Read more »

Increasing yield
Dividend Stocks

3 TSX Stocks With High Dividend Yields

These three high-yielding dividend stocks would be excellent additions to your portfolio in this volatile environment.

Read more »

Payday ringed on a calendar
Dividend Stocks

New Investors: 3 Top TSX Dividend Stocks That Pay Cash Monthly

Canadian investors looking for monthly dividends have plenty of options on the TSX. Here's three of my favourite stocks for…

Read more »

woman data analyze
Dividend Stocks

These U.S. Stocks Are No-Brainer Additions to Your Portfolio

Buy these two no-brainer U.S. stocks if you want to gain exposure to international stocks in your self-directed portfolio.

Read more »

Value for money
Dividend Stocks

1 Value Stock Every Canadian Investor Should Own

This value stock not only has a solid present, but a stable future at incredibly cheap and even oversold prices!

Read more »