REIT Investors: Create Long-Term Monthly Income With This Diversified, Global REIT

Investing in the right REIT could give you thousands in annual income on top of share growth you can expect for decades.

Amy Legate-Wolfe

Amy became interested in investing in 2018 after having her first daughter. After receiving a masters degree in journalism from Western University, she became frustrated that the finance industry remained a confusing place for Canadians like her: new parents, millennials, and other young people who needed to understand their finances. Now, Amy focuses on tech companies and renewable energy for growth opportunities, coupling that with long-term investing strategies and equities. She also provides investors with a daily newsletter, Canada Stock Digest, for daily market updates. Before joining Motley Fool Canada, she wrote for major news organizations including HuffPost, CTVNews.ca, and CBC. When she’s not researching investing strategies, Amy’s time is pretty much monopolized by her two wild daughters, but in what little spare time she has she loves to do yoga, go on walks with her dog, and travel with her husband. Follow Amy on LinkedIn and Canada Stock Digest. Favorite Investment Quote: “October: This is one of the particularly dangerous months to speculate in stocks. The others are July, January, September, April, November, May, March, June, December, August and February.” – Mark Twain

Published August 23, 2022 1:00 pm EDT

Real estate investment trusts (REIT) are some of the best ways for investors to make long-term income. True, you certainly want to find REITs that offer share growth as well. But having that passive income on hand means you can look forward to a specific amount of cash on a consistent basis, just like a paycheque.

What to look for

Now, of course, not all REITs are the same. If you want a strong REIT that’s going to be here a decade or more from now, you want to look at the industry it’s in. For example, right now, office spaces and residential properties are not doing so well. Furthermore, many are focused just on Canada. So, you want to find a company that offers diversified investments. That includes in terms of the types of properties they own, along with where they own them.

You’ll also want to look at the sector, and that means finding a company that won’t become obsolete or have a major shift in the decades to come. Some great options in the past have included energy infrastructure, but even this is changing. But if there’s one type of property that simply will never go away, it’s health care.

NorthWest REIT

That’s why I’m recommending NorthWest Healthcare Properties REIT (TSX:NWH.UN). This REIT is a great buy, as it checks all the boxes. NorthWest stock offers monthly passive income that continues to rise. It holds a diverse range of healthcare properties — everything from hospitals to office spaces and parking garages. And, of course, these are located all around the world from Australia to the United States.

The REIT continues to expand as well, which is why its passive income has remained stable, but hasn’t grown. And, frankly, I’m all for it at this point. NorthWest stock has been growing through acquisitions, and purchases of property that continue to expand its footprint. When it’s done, I’m fairly confident it will continue paying back investors in passive income now and in the next decade and beyond.

Create a substantial amount of passive income

So, how much passive income are we talking here? Even though NorthWest hasn’t risen its dividend, it still offers a yield of 6.14% as of writing. Shares trade at $13.15 as of writing, and it trades at just 7.43 times earnings. The business itself has a strong balance sheet, with its average lease at 14.1 years! That’s significant long-term income that both the company and investors can eat up — especially with occupancy at an astounding 97%.

Let’s say you were an investor then that had $10,000 to put towards this REIT. Right now, that would create passive income of $615 per year! That comes out to about $51 per month. Have more to invest? A $50,000 investment would bring in an astounding $3,077, or $256 per month! Meanwhile, shares have grown 150% since coming on the market in 2015. That’s a compound annual growth rate of 13.43%.

Bottom line

Investors seeking out REIT stocks should definitely be careful what they choose right now. NorthWest stock offers you significant long-term income from diversified sources all around the world. You could bring in thousands each year and be happy holding it for decades. And you can get the cash handed out each and every month.