Unlocking Hidden Gems: Undervalued REITs Trading Below $10
The Cyclical Nature of Investing
Investing, much like fashion, is cyclical. What’s hot today may be yesterday’s news tomorrow, and vice versa. With the Federal Reserve’s recent interest rate cuts, REIT investing is poised to make a comeback. Now is the perfect time to explore undervalued REIT shares trading below $10.
Passive Income Powerhouses
Warren Buffett once said, “If you don’t find a way to make money while you sleep, you will work until you die.” High-yield real estate notes offering 7.5% – 9% returns make earning passive income easier than ever. Net leases, where long-term tenants cover portions of insurance, property tax, and maintenance costs, have historically been profitable for investors.
Global Net Lease: A Potential Winner
Global Net Lease (GNL) owns and operates net-leased retail properties across the U.S. and Europe. This REIT offers investors the advantage of Net leases and a highly diversified portfolio of over 1,200 properties in nearly a dozen countries worldwide. Global recently finished a strong Q2 2024, increasing adjusted funds from operation (AFFO) by 2% while reducing debt by $251 million. With interest rates falling and leasing activity picking up, Global could pay off handsomely. Its shares are currently trading at $7.98, offering a 13.82% dividend yield.
AGNC Investment: Mortgage REIT with Double-Digit Dividend
AGNC Investment is a mortgage REIT that uses a combination of investor capital and borrowed money to buy large mortgage-backed securities (MBS) portfolios. Although interest rate hikes could negatively affect AGNC’s ability to pay dividends, careful portfolio selection and hedging strategies have kept this REIT on a 55-consecutive month streak of paying shareholder dividends. With interest rates now falling, AGNC is primed to deliver even more profits to investors. Its shares are trading at $9.45, offering a double-digit dividend in the 15% range.
Medical Properties Trust: Healthcare REIT with Upside
Medical Properties Trust is a large healthcare REIT with over 43,000 beds and 436 assets across the U.S., the UK, and Europe. Despite taking a hit earlier this year, MPW recently closed a partnership deal with Astrana Health, which is expected to result in a $200 million cash infusion in 2025. MPW shares are trading at $4.65, offering a 7% dividend yield. As the dust settles from the fallout with Steward Health, MPW’s share price and dividend could be set for strong rebounds in 2025.
Diversifying Your Income Streams
While Realty Income is a solid choice for consistent monthly dividend income, it’s essential to diversify your income streams and potentially reduce exposure to market fluctuations. Real estate investing through platforms like Arrived allows individuals to invest in shares of rental properties for as little as $100, providing the potential for monthly rental income and long-term appreciation without the hassles of being a landlord. With over $1 million in dividends paid out last quarter and a growing selection of properties across various markets, Arrived offers an attractive alternative for investors seeking to build a diversified real estate portfolio.
Leave a Reply