For investors looking for high dividend yields, you still can’t do any better than real estate investment trusts (REITs). Created by Congress to allow regular Joes the ability to own commercial real estate properties, the corporate tax-structure requires that REITs kick out much of their profits back to shareholders as juicy dividends. And there are REITs that cover every spectrum of the real estate market, from apartment buildings to shopping malls.
Yet some of the best performers around have been esoteric property styles. In this case, we’re talking about the public- and self-storage REITs.
Benefiting from America’s housing crisis — in both the trend towards downsizing and growth in the number of renters — self-storage REITs have managed to post great returns. In fact, according to the latest NAREIT data, the publicly traded self-storage sector managed to post a whopping 13.12% return for just the first quarter of this year. That performance builds on the self-storage REITs massive total returns over the last few years — thanks to the sector’s high 25% to 40% profit margins.
And with various positive factors — like rising M&A, continue baby-boomer downsizing and the rise of deed-restricted communities — self-storage REITs are poised to keep on growing into the future. For investors, the sector could be one of the best places to store their cash.
Here are three of the best players.