Top
Image Alt

The Investing Box

  /  Editor's Pick   /  3 REITs I’d buy to boost my passive income in 2023!

3 REITs I’d buy to boost my passive income in 2023!

Mature Caucasian woman sat at a table with coffee and laptop while making notes on paper

I think real estate investment trusts (REITs) are great stocks to buy for passive income. It’s why I already own Target Healthcare and Primary Health Properties in my portfolio. Such businesses are required to pay out at least 90% of annual profits in the form of dividends.

I don’t have bottomless reserves of cash. But here are three more of these property stocks I’m looking to buy if I have spare money to invest.

Residential Secure Income

I think Residential Secure Income (LSE: RESI) could be a perfect pick for these uncertain times. As the name suggests, this REIT specialises in renting out residential accommodation. Having a roof over our heads is one of life’s necessities and so income here remains stable at all points of the economic cycle.

I’d also buy the UK share because private rents in the UK are booming. Estate agent Hamptons says that tenants in England and Wales spent a record £71.5bn on rent in 2022, driven in part by rising rental costs. I expect this trend to continue too as Britain’s property shortage drags on.

Today, Residential Secure Income carries a healthy 5.6% dividend yield. I’d buy it even though high construction costs may remain a big problem in 2023.

Empiric Student Property

Student accommodation provider Empiric Student Property (LSE: ESP) offers excellent all-round value right now. It carries a 4% dividend yield for 2023 and trades on a price-to-earnings growth (PEG) ratio of 0.6. Any reading below 1 shows that a stock is undervalued.

The UK is also suffering from a shortage of quality student rental property. A weak development pipeline — allied with predictions of growing student numbers — suggests the problem will get worse in the years ahead too. So rents at Empiric should keep growing strongly.

Changes to immigration policy affecting foreign students could dent the firm’s future earnings. But right now, the business looks set for strong long-term profits growth.

Big Yellow Group

Self-storage specialists like Big Yellow Group (LSE: BYG) aren’t immune to tough economic conditions. Earnings could suffer if consumers scale back spending on extra space. Demand from small online retailers for stock storage might also dip if shoppers tighten their belts.

But as a long-term investor, I’m still tempted to buy this REIT. This is because Britain’s self-storage market has plenty of room for growth over the next decade, at least. Population growth, smaller living spaces, and the rise of e-commerce will all drive need for additional storage space.

Big Yellow is rapidly expanding to make the most of this opportunity too. It added an extra 191,000 sq ft of space to its portfolio between April and September. It also has 11 sites in development with a total capacity of around 900,000 sq ft.

Today, the FTSE 250 firm sports a 3.8% dividend yield, well above the 3% index average. I expect it to deliver market-beating dividends long into the future.

The post 3 REITs I’d buy to boost my passive income in 2023! appeared first on The Motley Fool UK.

Is Big Yellow Group Plc a top choice for growing wealth now?

Before deciding, we think this pick is another must-see.

Discover ‘One Top Growth Stock from The Motley Fool’ absolutely FREE.

Last year, this extraordinary company grew revenues by more than £217 million. And for 5 years, revenues have grown at a compounded rate of nearly 60%. That’s more-than double Google and Amazon! Earnings have exploded 3,000%.

And it’s happening in an unusual way most people never see.

As The Financial Times reports:

“On an average day, redacted readers buy roughly 43,500 items – from luxury dog beds to remote-controlled golf trolleys – after clicking on links in articles.”

When they do, this company collects some of the cash – adding up to humongous profits. Its global audience reaches some 506 million people – across 250 coveted online brands. While past performance doesn’t guarantee future results, we think the outlook could be spectacular.

So please, don’t leave without seeing, ‘One Top Growth Stock from The Motley Fool’.

Claim your FREE report now

setButtonColorDefaults(“#5FA85D”, ‘background’, ‘#5FA85D’);
setButtonColorDefaults(“#43A24A”, ‘border-color’, ‘#43A24A’);
setButtonColorDefaults(“#FFFFFF”, ‘color’, ‘#FFFFFF’);
})()

More reading

Royston Wild has positions in Primary Health Properties Plc and Target Healthcare REIT Plc. The Motley Fool UK has recommended Primary Health Properties Plc. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.