There are some different ways that you can earn money within the realm of investing in real estate. One option is to purchase physical properties, and then rent them out, maintain them, and let the properties appreciate in value. You could also purchase homes in disrepair, and fix them up, then flip them at a profit.
But if you would rather take a more hands-off approach to investing in real estate, you might prefer to put your money into a REIT instead. REITs are businesses that derive revenue from properties that are in their portfolios. And here are two REITs that might really take off this year.
1. Public Storage
The need for having self-storage has been heightened in the wake of the Covid pandemic. Over the last two years, living arrangements have changed for many, and work setups have also shifted. In fact, the number of individuals working remotely has created a higher need for at-home space available. And that is where self-storage comes in.
One leader within the self-storage space is Public Storage. With facilities throughout the U.S. and Europe, Public Storage has enjoyed large growth and is poised to build on that consumer demand in 2022.
For the three-month span ending December 31, 2021, Public Storage saw its core earnings from operations rise 20.8% compared to the same time period in 2020. The company has also acquired 232 self-storage facilities with about 21.8 million net rentable square footage.
The Covid pandemic has changed the ways in which a lot of consumers are doing their shopping. Over the last two years, digital sales have really taken off. Consumers have been ordering everything from groceries to apparel to medications online, and e-commerce has gotten so big that the demand for warehousing space has started to exceed the available supply.
That puts businesses like Prologis in a great position for this year. As more and more retailers are ramping up their e-commerce platforms, Prologis will have no problem getting more business.
In its newest earnings report, the business projected an avg. occupancy rate of 96.5% to 97.5% throughout its global facilities this year. And as the biggest player within the industrial sector, the company is in a great spot to capitalize on what will most likely be a permanent shift in how consumers buy goods.
Sit back and make profits
The beauty of investing in REITs is getting to enjoy a steady source of passive income without having to do anything. That is because REITs commonly pay bigger-than-average dividends. These two REITs might reward investors generously this year and beyond, so it might be worth carving out a space for them in your portfolio.