Real Estate Stocks List

There are a few universal truths about investing in real estate:

• Real estate values and rents tend to rise with inflation. 
• Real estate investments typically hold their value rather than shorting out due to inflation.
• Short-term leases, including residential one-year leases, allows investors to adjust rents to reflect rising costs while maintaining excellent return.

There's no question that investing in real estate offers some fantastic perks — steady cash flow, great returns, financial security, tax advantages, diversification, inflation protection, passive investment opportunities, capital building and more. (Need we go on?)

High demand and low supply led to some interesting phenomena during the height of the pandemic. The pandemic induced extraordinary growth in home values, which increased demand and pulled up building costs throughout the U.S. As a whole, U.S. real estate prices rose dramatically during 2020 and 2021 primarily due to the following reasons: Historically low interest rates, a lower inventory of homes available due to homeowners choosing to refinance instead of sell, plus the phenomenon of many low inventory of homes during the pandemic. 

However, it's important to keep in mind that Goldman Sachs projects further declines in 2023 including the following: 

• New home sales (another 8% drop)
• Existing home sales (another 14% drop)
• Housing GDP (another 9.2% drop)

So, does that mean that you should now invest in real estate stocks? Real estate stocks include real estate investment trusts (REITs), which are companies that own or finance income-producing real estate. Let's walk through real estate stocks and inflation, whether real estate stocks are a good investment, when real estate stocks do well, real estate stock performance, top real estate stocks and how to invest in real estate stocks.

Real Estate Stocks and Inflation

The Consumer Price Index (CPI) measures a large group of consumer products: 

• Food
• Housing
• Apparel
• Transportation
• Medical care
• Recreation
• Education 

The CPI measures the average change over time in the prices paid by consumers. 

The Bureau of Labor Statistics (BLS) interviews thousands of American families on their spending habits. 

Over the past 12 months, the all items index increased 8.5% before seasonal adjustment.

• The gasoline index fell 7.7% in July.
• The energy index fell 4.6% over the month as the indexes for gasoline and natural gas declined.
• The food index increased 1.1% over the month.
• The food at home index rose 1.3%.
• The index for all items less food and energy rose 0.3% in July.
• The food index increased 10.9% over the last year, the largest 12-month increase since the period ending May 1979.

Real estate investments can offer protection against inflation. When the prices of goods and services go up, home values and rent also typically increases as well. Investment properties can give you rising monthly income and appreciation when costs are going up. 

While the market is going down, real estate will still be there, consistently churning out income to investors.

Are Real Estate Stocks a Good Investment?

Real estate stocks, including REITs, are known for the income they generate. REITs are required to pay out 90% of net income and typically have high dividend yields. Low-volatility stocks in your portfolio may pay income consistently. If you invest directly in real estate (not through stocks, you can take advantage of numerous tax breaks and deductions, which can save you money. You can deduct the costs of owning, operating and managing a property and it can offer tax advantages over its useful life. You may even be able to defer capital gains as well.

Investing in real estate directly also allows you to benefit from cash flow, which is the amount of profit you bring in each month after collecting all income and taking care of all operating expenses. In the case of real estate, cash flow only strengthens over time. At the same time, you're all the while building up equity. 

When Do Real Estate Stocks Do Well?

Real estate can be an excellent investment no matter whether the stock market is pinballing all over the place or doing really well. Investing in a wide variety of types of real estate stock, including REITs, can help mosey your portfolio along. This helps you build a more diversified portfolio. 

Real Estate Stock Share Performance

Housing prices are adjusting down from the 2020-2021 highs due to rapid interest rate hikes by the Fed, not to mention low borrowing rates and a constrained building supply during the pandemic. Real estate is a worthwhile long-term investment and the long term outlook is positive for 2022. There has been a real estate boom in 2022. In fact, the housing sector is in better shape today, particularly because of the annual gain in single-family house values and rentals, low foreclosure rates and higher numbers of home sales. In fact, the national home prices have increased 33% over the previous two years.

Top Real Estate Stocks List

Let's take a look at some real estate stocks you might want to consider, including Exantas Capital Corp. and Washington Prime Group Inc. 

Exantas Capital Corp. Preferred Shares C

Exantas Capital Corp. Preferred Shares C (NYSE: XAN.PC), a REIT, focuses on originating, holding and managing commercial mortgage loans and commercial real estate-related debt investments in the United States. The company, formerly Resource Capital Corp., changed its name to Exantas Capital Corp. in May 2018. It invests in the following:

• Commercial real estate-related assets
• First mortgage loans
• First priority interests in first mortgage loans
• Subordinated interests in first mortgage loans
• Mezzanine debt
• Commercial mortgage-backed securities
• Commercial finance assets
• Asset-backed securities
• Debt tranches of collateralized debt and loan obligations
• Structured note investments
• Syndicated corporate loans
• Preferred equity investment in a commercial leasing enterprise. 

Washington Prime Group Inc. Preferred Shares

Washington Prime Group Inc. Preferred Shares (NYSE: WPG.PI), a retail REIT and a recognized leader in owning, managing, acquiring and developing retail properties. The company has increased cash flow and offers growth opportunities throughout the U.S. Washington Prime Group, a registered trademark of the company.

The Washington Prime Group Inc Preferred Shares Series H of Washington Prime Group Inc. The company combines a national real estate portfolio across the entire shopping center sector to increase cash flow through rigorous management of assets.

How to Invest in Real Estate Stocks

Let's take a comprehensive look at how you may want to approach investing in real estate stocks.

Step 1: Identify your goals.

How might you want to invest? One of the most important things you should do is figure out exactly how you want to invest. Understanding your financial goals ahead of time will help you understand exactly what you're investing in. It's a good idea to consider different buckets for different goals, such as retirement, short-term savings and more. Your investment approach should be different for each.

Determine when you think you might need the money. This is called your time horizon, before you plan to need your investment money. Doing this is part of building your investment strategy and portfolio.

Also consider your risk tolerance. This means you evaluate how comfortable you are with risk. For example, investing in a single stock is more risky than investing in mutual funds. Mutual funds are less risky because you invest in groupings of stocks. 

Regardless of what’s in your investment portfolio, it's a good idea to understand what you invest in.

Step 2: Decide how you want to invest.

How do you want to invest? If you like the idea of investing by yourself, you may want to consider investing with a robo-advisor. A robo-advisor is a type of online advisor that gathers information about you through an online survey and invests for you based on that information. 

If going the DIY route doesn't sound like the route you want to go, you can also consider investing with a professional. They'll take care of your investment portfolio for you after you walk through your goals and investment portfolio.

Don't forget to ask about extra fees, which can make a big difference to your investments over time. The more you pay, the less money you have in your investments. You may need to start with a certain minimum, such as $500 or $1,000. Many apps have no account minimum requirements.

Step 3: Decide how many stocks you want to purchase.

Individual shares (piece of ownership) of companies you believe will increase in value.

Consider diversifying your portfolio by putting a handful of stocks in it instead of investing in just one stock. A pile of stocks may offer more diversification than just a couple of stocks. iN fact, 10 stocks may offer too little diversity and more than 30 might offer too much and might be too much work to maintain. 

If you're just starting out or don't have much money to invest, you may want to start with a smaller number of stocks and work your way up.

Step 4: Monitor your investments.

If you have investments, you'll want to make sure you keep your eye on them, not just brush them aside and forget about them until you retire. 

• Determine whether you're on track. In order to evaluate the performance of your portfolio, establish a weighted, blended benchmark consistent with your target allocation. Track your overall progress in order to check out exactly how to check out what you're doing. 
• Evaluate your individual holdings. What are your individual holdings doing? Market benchmarks such as the S&P 500 Index can help you identify how well your funds are doing. If your stocks underperform against the index, you may want to switch up your investment strategy. Checking its performance against your own goals and expectations for the stock can make a huge difference.

Real Estate Stock ETFs

Buying shares of an ETF is one of the easiest ways to invest in real estate. Investing in real estate exchange-traded fund (ETF) allows you to diversify your portfolio automatically. 

For example, an ETF could offer you the opportunity to invest in residential real estate and commercial property all at once.

Some ETFs are made up completely of REITs to get real estate exposure in their portfolios. Let's take a look at a few REITs to help you choose your investment:

• Vanguard Real Estate ETF (VNQ)
• VanEck Mortgage REIT Income ETF (MORT)
• Goldman Sachs Future Real Estate and Infrastructure Equity ETF (GREI)
• Xtrackers International Real Estate ETF (HAUZ)
• Invesco Active U.S. REal Estate ETF (PSR)
• iShares Residential and Multisector Real Estate ETF (REZ)
• Vanguard Global ex-U.S. Real Estate ETF (VNQI)

Ultimately, you can't go wrong with real estate stocks. However, keep in mind that you need to do your research prior to investing in real estate. You want to make the right investment decisions the first time so you don't find yourself in the wrong sector later on.