Real Estate Investment Trusts (known as REITs) are some of the best long-term options for investors. That’s because they can offer real estate exposure, a healthy recurring income, and plenty of growth potential. In other words, picking REITs to buy and hold is a great option for investors.
Fortunately, the market gives us plenty of options to choose from, including this stellar trio to add to your portfolio.
REIT 1: Canadian Apartment REIT
Canadian Apartment REIT (TSX:CAR.UN) is one of the largest residential REITs in Canada. This immediately gives it a unique appeal to investors looking at REITs to buy and hold.
The broader shortage of housing makes Canadian Apartment REIT a unique pick among investors looking for real estate exposure. That’s because the REIT boasts high occupancy and low turnover.
In other words, the REIT offers defensive appeal in addition to its broader appeal as an income-producer.
More importantly, the current climate supports long-term rent growth and defensive cash flows that will keep prospective investors collecting monthly payouts, just like a landlord.
That landlord reference is an important part that largely gets dismissed.
One of the long-standing methods to establish a passive income stream is by owning a rental property. But with real estate prices still inflated, and interest rates still stubbornly high, that means many would-be landlords are priced out of the market.
And that’s the sweet spot where buying REITs to buy and hold forever, like Canadian Apartment REIT, can be effective.
In terms of distributions, Canadian Apartment REIT offers a 3.9% yield. That works out to a monthly distribution of $0.129 per unit.
For investors with $1,000 to invest in this REIT, that payout works out to roughly one added share through reinvestments each year.
REIT 2: Granite REIT
Granite REIT (TSX:GRT.UN) offers an alternative to investors seeking REITs to buy and hold outside of the traditional residential real estate market.
Granite caters to a different segment of the REIT market, specifically industrial buildings and logistics facilities. The REIT’s portfolio not only includes properties in Canada, but in several European countries as well.
In total, Granite boasts approximately 147 properties across six countries. The company’s tenants include some of the largest logistics, retail, and industrial companies on the planet.
This translates into longer lease terms that, in turn, provides a reliable revenue stream that leaves room for growth and a healthy distribution. It also provides investors with a global diversification that few REITs in Canada can offer.
As of the time of writing, Granite’s monthly distribution works out to a yield of 3.8%. Using that same $1,000 example from above, Granite’s monthly $0.2958 per unit payout will generate just shy of $40 in the first year.
That’s not enough to retire on, but it is enough to start a growing position in one of the best long-term REITs to buy and hold right now.
REIT 3: SmartCentres REIT
The third REIT for investors to consider buying now is SmartCentres REIT (TSX:SRU.UN). SmartCentres is predominantly a retail-focused REIT, with 197 properties located across Canada with an impressive 98.6% occupancy rate.
Additionally, the REIT also offers commercial, office, industrial, and residential space, as well as a multi-billion-dollar development pipeline.
That backlog of development includes high-rise residential, purpose-built rentals, senior housing, storage, and mixed-use urban centres.
That’s in addition to its core retail anchor, which includes anchor tenants that include some of the largest retailers on the planet.
In other words, SmartCentres is a retail REIT today, but it’s evolving into a diversified real estate platform.
And let’s not forget the monthly distribution. As of the time of writing, SmartCentres offers a yield of 6.7%. For investors with an initial $1,000 to drop, that’s enough to generate a few shares through reinvestments each year.
That generous distribution, along with its superb long-term potential, makes SmartCentres a stellar long-term pick for investors looking at REITs to buy and hold right now.
What are your REITs to buy and hold?
The trio of REITs mentioned above offer defensive appeal, juicy income, and long-term growth appeal.
For those investors looking for REITs to buy and hold, they warrant a small position in any long-term diversified portfolio.
Buy them, hold them, and watch your future income grow.
