Many real estate professionals believe that the real estate market, both commercial and residential, is positioned for strong growth over the next 2-5 years. The rental market has gained a lot of strength in the two years, and experts are expecting this demand to start trickling over into ownership as long a rates and home prices stay low.
One of the easiest ways to invest in the Real Estate market is through REITs. If you are looking to invest in residential REITs, there are 32 different options to choose from. While many of these trusts have had to cut their dividends over recent years, we found 6 which have stable dividend payouts without recent declines. Dividend stability is a key requirement for us to invest in a REIT.
Associated Estates Realty Corp (AEC)
Associated Estates Realty Corp has been paying dividends since 1994 and has a dividend yield of 4.5%. It has not raised its dividend since 2007, and it looks like it will continue that trend in 2012. Associated Estates Realty is in the business of property management, development and acquisition. Their business focuses on construction and multi-family property development.
Home Properties, Inc. (HME)
Home Properties has also been paying dividends since 1994, but has raised its dividend in 2011 and 2012 by an average of 7% per year. It currently has a dividend yield of 4.4%. Home properties buys and rehabilitates apartment communities in the Northeast and Mid-Atlantic US States. They also buy, develop and operate apartment communities.
Mid-America Apartment Community (MAA)
Mid-America Apartment Community has a dividend yield of 4% and has been paying dividends since 1994. It has either raised or maintained its dividend every year for the last 6 years. MAA raised its dividend in 2011 and has increased its dividend again in 2012. Mid-America Apartment Community is entirely focused on owning and operating apartment communities in the Sunbelt region of the US. The company owns over 150 properties.
Sun Communities (SUI)
Sun Communities has a dividend yield of 6.1% and has been paying dividends since 1993. Its dividend has remained steady for the last 5 years at $2.52 per year which is consistent with their most recent dividend declaration. Sun Communities specializes in manufactured housing. The company develops manufactured home communities and also offers sales and leases of the homes to tenants. Their operations are located in Midwestern and Southern US States.
UMH Properties Inc (UMH)
UMH Properties has a dividend yield of 7% and has been paying dividends since 1990. It experienced a dividend cut in 2008 but since then it has maintained a $.18 quarterly distribution. This trend looks to continue in 2012. UMH is also in the manufactured home business. Its main focus is the own and operate manufactured home communities and to lease homes to residents. UMH owns 28 manufactured home communities which are mostly located on the East Coast.
Two Harbors Investment Corp (TWO)
Two Harbors has the highest dividend yield of the group at 15.3%. While it has only been paying dividends since 2009 the dividend payouts have been steady and consistent. The Q1 2012 dividend is set to the same amount of $.40 as previous quarters and we should see an ex-dividend date coming up soon in March. Two Harbors is focused on investing in residential mortgage-backed-securities. 90% of their portfolio is made up of agency and non-agency RMBS.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.