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What Are The Top 10 US REIT Stocks To Invest In For 2023?

We’ve compiled the top US REIT stocks that you can buy directly from India. Find ✓ how REITs work and ✓ why investors prefer them over actual real estate.
February 14, 2023

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Real Estate Investment Trusts (REITs) own income-generating assets across the property sector in the US. Most major REITs are publicly traded on a US stock exchange like NYSE or NASDAQ. 

Investors who buy REIT stocks can indirectly invest in the real estate market and reap its rewards. If you’re wondering how REITs earn money, it’s pretty straightforward.

REITs generate income by leasing out or renting out their assets (property). Listed REITs own roughly $2.5 trillion worth of assets and have a stock market capitalization of $1 trillion. 

This blog will give you a factual outlook on the pros & cons of REIT stocks. Towards the end of the blog, we’ll help you understand how to invest in the best REIT stocks using Cube Wealth.

Important: We strongly suggest you consult a Cube Wealth Coach before investing your hard-earned money in any US stock. 

Top 10 Best REITs To Invest In For 2023

Ticker Name Stock Price Market Cap
APLE Apple Hospitality REIT $18.06 $4.12B
ARR ARMOUR Residential REIT $8.43 $809.69M
BPYU Brookfield Property REIT Inc.** - -
BRG Bluerock Residential Growth REIT Inc $26.59 $947.85M
CIO City Office REIT $17.85 $777.45M
CTRE CareTrust REIT Inc $19.04 $1.85B
GMRE Global Medical REIT $16.12 $2.14B
SBRA Sabra Health Care REIT Inc $14.59 $3.37B
WRE Washington REIT $25.19 $2.2B
WSR Whitestone REIT $13.09 $643.32M

**BPYU was de-listed from Nasdaq on 26-07-2021. 

What Are REIT Stocks?

REIT stocks are publicly traded on US stock exchanges. When investors buy a REIT stock, they invest in a portfolio of real estate assets that reaches far and wide into the property market.

The assets may include:

  • Hotels
  • Apartments
  • Offices
  • Cell towers

REITs may focus on one type of property sector or multiple property sectors. Their profits change according to their focus but historically, REIT stocks have generated relatively lucrative returns.

Some REIT stocks are trading above their pre-COVID levels which may be viewed as a positive sign considering industries like the aviation sector are still clawing their way back to the top. 

Ticker Name March 2020 March 2022
APLE Apple Hospitality REIT Inc $12.84 $18.06
BPYU Bluerock Residential Growth REIT Inc $11.29 $26.59

As per law, REITs are required to distribute at least 90% of their taxable income to shareholders through dividends. Some REITs end up distributing 100% of their taxable income in the form of dividends. 

Types Of REIT Stocks

Before delving into the various types of REIT stocks, it’s important to note that the underlying principle of REITs remains the same - they invest in real estate property.

1. Healthcare REITs

Healthcare REITs invest in hospitals, retirement homes, medical centres (clinics), nursing centres, etc. Healthcare REITs primarily generate income through occupancy fees and private fees. 

Overall, the performance of Healthcare REITs is directly related to the performance of the healthcare sector. But other factors like an ageing population and patient demographics also impact Healthcare REITs. 

2. Retail REITs

Retail REITs invest in shopping malls, standalone retail stores, and other retail buildings. Retail REITs generate income through rent and occupancy fees. 

If the retail sector is experiencing a downturn, its impact will affect the performance and profitability of Retail REITs. Moreover, a large set of consumers have shifted to online shopping.

Thus, you must speak to a wealth coach to understand if you should invest in a Retail REIT. 

3. Residential REITs

Residential REITs invest in rental family apartment buildings, gated communities, and manufactured housing units and represent a significant portion of the REIT family.

Conventional logic states that prime real estate may be located in bustling areas where buying a house may be difficult for a majority of the population. 

This may force individuals and families to rent an apartment which drives up the demand and profit generated by these rental properties. Residential REITs leverage this but may suffer when the real estate market is down.

4. Office REITs

Office REITs invest in office spaces - buildings, complexes, and sometimes coworking spaces. Their primary source of income is through long term lease agreements and periodic rent renewals. 

The pandemic has led to a drastic switch from physical office buildings to fully digital workspaces. However, Office REITs have a stronghold in major areas where energy or manufacturing employees work.

Going online poses a major logistical challenge to these industries which is why they may still require office spaces often located in prime locations. 

In any case, it would be best to consult a Cube Wealth Coach before investing in any US stock. 

5. Mortgage REITs

Mortgage REITs don’t invest in equity which means that they almost always do not physically own real estate portfolios. Instead, they invest in mortgages on the secondary market.

Mortgage REITs generate income through interest payments as they finance income-producing real estate investments. 

Watch this video to know more about the benefits of using an app like Cube Wealth

Benefits Of Investing In REITs

1. Dual Benefit Of Stocks & Real Estate

REITs help investors buy into the benefits of investing in both real estate and stocks. Given the historical performance of REITs, this dual benefit may be one of the biggest advantages of investing in REITs.

2. Dividends

Like we discussed before, REITs are required to distribute at least 90% of their taxable income to their shareholders in the form of dividends. Some REITs even distribute 100% of their taxable income.

Given the market capitalization, purchasing power and the demand for real estate, REITs have been known to provide competitive dividends over the years. 

This may be a potentially positive aspect of investing in REITs for investors who are on the lookout for possible passive income generating assets. 

3. Easy To Understand 

If you’ve read our blogs on the tips to invest in any equity-linked asset, you know that understanding the stock you’re investing in is crucial to getting the best out of the investment.

REITs fare very well in this regard since the REIT business model is simple to understand - REITs own a portfolio of real estate assets that generate income through rent or mortgage interest payments.  

Risks Of Investing In REITs

1. Rising Interest Rates

Historically, REITs have been known to underperform when the interest rate rises. Investors may turn to safer, fixed income assets like bonds during such cases. 

But you can mitigate this risk  by getting US stock advice from expert RIA, Rick Holbrook who offers US Stock Advisory via the Cube Wealth App.

2. Low Liquidity

While REITs can be publicly traded, REITs are less liquid than other stocks. This is down to two factors:

  • Repurchase offers do not guarantee completely or even partial sale of the desired REIT stocks
  • It may be difficult to find a buyer immediately in case an investor wants to quickly liquidate the REIT stock for cash. 

Thus, you must consult a Cube Wealth Coach before investing in a REIT or any US stock. 

3. Market Based Risks

REITs are traded on stock exchanges so naturally, they are subject to market risks that include short term fluctuations due to investor behavior's or interest rates. 

However, Cube Wealth helps you weigh the risks of investing in any US stock with advice from award-winning RIA, Rick Holbrook. Read on to know more.

How To Invest In REITs From India?

The Cube Wealth app allows you to buy the best US stocks for as low as $1. There are two ways you can choose to invest in REIT stocks using Cube Wealth:

  • Advisory: Get buying and selling advice from RIA Rick Holbrook, who has 40 years of experience and ~$130 million AUA
  • DIY: Buy REIT stocks on your own of companies like Apple Hospitality REIT Inc; Brookfield Property Reit Inc; Washington REIT

Watch this video to know how US stock advice works on the Cube Wealth app

Note: Facts & figures are true as of 25-03-2022. None of the information shared here is to be construed as investment advice. Exercise caution when investing in assets like stocks, mutual funds, alternative investments, and others.

Priya Bansal
Curious about personal finance and all things money. Can either find me reading a book or dancing to a tune.

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