Are you a 20- or 30-something investor with decades to let your investments compound? Are you a retiree who relies on your portfolio for income? Or do you have a high-risk tolerance and want to get in on the ground floor of the next big thing? Regardless of which statements you answered "yes" to, there are some great real estate stocks that you might want to put on your radar.
With that in mind, here are three real estate stocks -- for investors of various risk tolerance levels -- that look like especially interesting opportunities now.
One of the best dividend stocks in the market
Realty Income (NYSE: O) is an excellent combination of growth, income, and safety. If you aren't familiar, Realty Income owns a portfolio of more than 6,600 single-tenant properties, most of which are leased to retail tenants.
There are two big reasons why this isn't just another retail investment. First, Realty Income's tenants are mostly involved in recession- and e-commerce-resistant industries: Think drugstores, warehouse clubs, and convenience stores, just to name a few examples. Second, tenants sign long-term triple net leases, which generally have gradual rent increases built right into them.
The proof is in the performance. Realty Income has made 612 consecutive monthly dividend payments and increased the payout at least quarterly for the last 23 years. Since its 1994 NYSE listing, Realty Income has generated a 15.3% total return for its investors, handily beating the S&P 500.
An industry leader with a bright future
American Campus Communities (NYSE: ACC) is the only real estate investment trust REIT that is a pure play on student housing properties. Not surprisingly, it got crushed at the start of the COVID-19 pandemic as colleges were forced to close, and leasing activity was weak in the fall of 2020 due to the prevalence of virtual instruction.
However, recent data suggests the company is back on track. In the second quarter, American Campus Communities reported 14% year-over-year funds from operations (FFO) growth, and the company said that pre-leasing for the 2021 to 2022 academic year was at nearly 92% of the portfolio as of late July.
The company is also making excellent progress on its massive project at the Walt Disney World Resort, which still has five of 10 phases yet to be delivered.
In a nutshell, American Campus Communities still has a very bright future and could be a big winner in the gradual return to normalcy in the U.S.
The real estate social network
Here's one for all the risk-tolerant readers. We recently learned that neighborhood social networking platform Nextdoor is planning to go public later this year through a special-purpose acquisition company (SPAC) merger with Khosla Ventures Acquisition Co. II (NASDAQ: KVSB).
The deal values Nextdoor at $4.3 billion, which is extremely tiny compared to other major social networking platforms. Twitter (NASDAQ: TWTR), Pinterest (NYSE: PINS), and Snap (NASDAQ: SNAP) currently have market caps of $56 billion, $37 billion, and $118 billion, respectively.
While Nextdoor is certainly in an earlier stage than any of those, the early results are impressive. Nextdoor is in more than 275,000 neighborhoods and is used by almost one-third of U.S. households. The company has 27 million active weekly users, so far, and an absolute rockstar CEO in Sarah Friar, who was the former CFO of Square (NYSE: SQ) as it grew from a niche small-business payment-processing hardware maker to a $100 billion fintech ecosystem.
Which is right for you?
These are three interesting investment opportunities right now, listed in order from least risky to most. While I think all are excellent choices, the best one for you depends on your investment goals, risk tolerance, and the rest of your personal situation.