Over the last month, we’ve started to see some stocks appear to bottom and actually rise in value in this environment. Of course, a lot of that has been due to recent data on inflation, particularly south of the border, which shows that price increases could finally start to slow down.
But while stocks across the board have seen a minor recovery in their share prices, many real estate stocks have seen a significant bounce back. Real estate investment trusts (REITs) across the industry reported much better earnings in the third quarter.
And after many of these high-quality REITs lost a tonne of value at the start of the year, now is the opportunity that investors have to initiate a long-term investment at such compelling valuations.
So, if you’ve got cash that you’re looking to invest today, here are two of the best real estate stocks to buy with as little as $100.
One of the best real estate stocks to buy for long-term growth
After the selloff we’ve seen all year, one of the cheapest real estate stocks you can buy now is InterRent REIT (TSX: IIP.UN). InterRent is one of the best REITs to buy for long-term growth.
The REIT is constantly looking at how it can acquire new properties to expand its portfolio. In addition, it consistently upgrades its existing properties to increase their value and, consequently, the rental rates it can charge.
This has led to InterRent being one of the top-performing real estate stocks over the last decade. However, because it’s more of a growth stock, it’s also selling off much quicker this year, considering it was trading with a growth premium to start the year.
Furthermore, as interest rates rise and cause property values to continue to fall, InterRent is certainly seeing the effects of this environment. However, its operations continue to look impressive.
Not only is it continuing to increase the rental rates for its suites, which helped it achieve same-property net operating income (SPNOI) growth upwards of 12% last quarter, but it’s managed to keep its occupancy rate strong at roughly 96%. It even just increased its distribution in its most recent earnings report by over 5%.
So, if you’ve got cash to invest today, real estate stocks offer some of the best value, and InterRent is one of the top stocks to buy and hold for the long haul in the space.
A top REIT to buy for its exposure to U.S. real estate
Morguard North American Residential REIT (TSX: MRG.UN) is another of the best real estate stocks you can buy today.
The stock owns some properties in Canada — mostly in Ontario. However, the majority of its assets are diversified across the U.S., and that’s the main reason Morguard is one of the best REITs to buy now.
First off, real estate properties in many regions south of the border started the year at lower valuations than those in Canada, which means less impact on property valuations as interest rates have increased.
In addition, though, the U.S. has far fewer rent controls than we do in Canada, which allows real estate stocks like Morguard to offset more of its costs in this high-inflation environment.
For example, in the third quarter, Morguard’s same-property expenses increased by nearly 7% as a result of inflation and higher utility costs. However, Morguard was able to make more money and increase its SPNOI by over 20% in the quarter due to its average monthly rents increasing by over 14%.
This goes to show what a high quality and reliable investment that Morguard can be, especially in today’s highly uncertain environment.
So, if you’ve got cash to invest and are looking for the best real estate stocks to buy, Morguard is certainly one of the best to consider.
