Investing in real estate can be very lucrative. This allows investors to generate passive income and capture price increases.
But real estate investing can be stressful. You’ll have to find the right property, deal with tenants, manage contractors and make repairs, and navigate a multitude of legal, tax, and accounting information. As such, buying commercial property is not for everyone.
A less stressful way to invest in real estate is to buy real estate investment trust shares (REIT). WP Carry (WPC 0.49%) A great option to consider.
Ultra low risk REIT
WP Carey is big Distributed REITThe company owns over 1,500 operationally significant assets across industrial, warehousing, retail, office and other sectors. It is further diversified by geographic region, with holdings in North America and Western Europe.
Long-term triple net leases (NNN). These make tenants responsible for maintenance, insurance, and property taxes. The result is a very stable rental income.
WP Carey pays a significant portion (around 80%) of their income. Operating funds (FFO) 2022 — to shareholders through dividends. It allows you to keep some profits to fund new investments while still giving you a nice cushion.This means that every $1,000 invested in stocks can be turned into about $50 per year. passive income.
It also has a strong investment grade balance sheet. This gives us even more financial flexibility, allowing us to make acquisitions while increasing our dividend.
This combination of features makes WP Carey one of the lowest risk REITs. As such, it is a very low-stress investment.
The company has an excellent track record of dividend growth.
This upward trend will continue, and REITs will be able to steadily provide more passive income to investors.
Rent increases provide the company with a solid foundation for growth. Almost all leases allow for annual rent increases. More than half of them contain escalation clauses related to inflation, while the majority of the remaining leases increase in value at a fixed rate. Rents at WP Carey have accelerated as inflation surged over the past year, and this trend is expected to continue next year.
Another big growth driver is acquisitions. WP Carey’s strong financial profile allows us to continue to grow our diversified real estate portfolio. The REIT invested $1.42 billion in adding new properties last year. About two-thirds of the company’s deals are in industrial real estate and warehousing, sectors that have seen some of the best investment opportunities in recent times.
Meanwhile, the company entered 2023 with a strong pipeline of acquisition opportunities, including deals worth more than $500 million in advanced stages. We have significant liquidity to fund these and other transactions that occur throughout the year. Aggressive acquisitions and rising rents on existing properties have steadily increased his FFO per share, allowing WP Carey to continue increasing its dividend.
A relaxed way to invest in real estate
WP Carey makes investing in real estate easy. REITs allow investors to own a portion of a high quality real estate portfolio and earn a portion of stable rental income.
And with the company’s built-in rent growth and ability to make incremental acquisitions, it should be able to continue to increase dividend payments. Investors can therefore sit back and relax while amassing a steadily increasing stream of income.