There aren't many options for good income these days. One of the good remaining categories is real estate investment trusts (REITs).
Commercial property has the pleasing attributes of strong income and long-term capital growth, as long as the property remains economically useful.
Some of the best REITs like Rural Funds Group (ASX: RFF) have had price increases, decreasing the yield on offer.
However, these two REITs both have yields around 6%:
BWP Trust (ASX: BWP)
BWP Trust is one of the largest warehouse owners in Australia. It leases its properties to Wesfarmers Limited's (ASX: WES) Bunnings.
Bunnings is one of the best retail businesses in the country, so it's one of the best tenants BWP could ask for.
Internet shopping could spell long-term trouble for BWP, but home improvement businesses are still doing well in the USA, which has a much higher rate of online shopping.
BWP is trading at 17x FY18's estimated earnings with an unfranked distribution yield of 5.96%.
National Storage REIT (ASX: NSR)
National Storage is the largest self-storage provider in Australia.
The high price of Australian residential property per square metre makes National Storage's offering attractive to users.
Its size allows it to save on costs whilst still offering competitive prices compared to its peers.
National Storage is currently trading at 15x FY18's estimated earnings with an unfranked distribution yield of 6.03%.
Foolish takeaway
Both REITs should be good income choices for the next few years. The online retail growth makes me a little nervous about BWP, so National Storage is my favourite of the two for this reason.
