Establishing a stable and recurring income stream is a key goal for every investor. While the way in which investors approach that next dividend darling may differ, the result is the same. Fortunately, there are plenty of great options to consider on the market, including this stellar opportunity.
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Investing in a REIT
RioCan Real Estate (TSX: REI.UN) is one of the largest real estate investment trusts (REITs) in Canada. The company operates a portfolio of over 190 properties situated around major metro areas across the country. That number comprises not just retail properties but also a growing number of residential properties.
In fact, in recent years, RioCan has shifted that property mix to include a growing number of mixed-use residential properties. And itâs from those mixed-use properties that prospective investors will see a huge opportunity looming.
The residential properties comprise residential towers sitting atop several floors of retail. Apart from catering to the complementary demand of both, the properties are also located in high-traffic transit corridors.
In short, they are in-demand, high-traffic options that help to make RioCan your next dividend darling.
Speaking of dividend income
Just like a landlord collecting monthly rent, RioCan offers investors a juicy monthly distribution. As of the time of writing, the yield works out to an impressive 5.85%, making it one of the better-paying options on the market.
It also means that investors who drop $45,000 into RioCan can expect to generate a monthly income of just under $220. And donât forget that investors who arenât ready to draw on that income yet can choose to reinvest, allowing it to grow until needed.
Would-be landlords should also note a few other compelling reasons why RioCan is your next dividend darling.
That initial investment example above is considerably lower than a typical downpayment for a single property. Establishing that income stream is also not contingent on finding a tenant who can pay every month.
Perhaps most importantly, the risk associated with owning and maintaining a single property is significantly more than investing in a portfolio of what is hundreds of units.
Final thoughts on your next dividend darling
Adding a REIT like RioCan to your portfolio is not just a great way to diversify. Itâs also a superb method to establish or augment an income stream that is considerably lower risk than owning a single rental property.
Additionally, itâs worth noting that like much of the market, RioCan is trading down in 2023. As of the time of writing, the REIT is down over 12% year to date. This makes it a great time to pick up this next dividend darling at a discounted rate.
In my opinion, RioCan should be part of every larger, well-diversified portfolio.
Buy it, hold it, and enjoy the income it generates.
