Here’s 2 of my favourite REITs

Most Australians think that the main two asset classes are shares and property. I think there’s a good middle ground with real estate investment trusts (REITs).

REITs are commercial property businesses that operate in a variety of sectors. There are office REITs, warehouse REITs, retail REITs among others.

There are a few REITs that are unique on the ASX and I think they are interesting investment opportunities, below are two of my favourite REITs.

National Storage REIT (ASX: NSR)

National Storage is Australia and New Zealand’s largest self-storage provider with 127 centres.

It has a compelling offering. Real estate in Australia has reached extremely high levels, an extra bedroom in a house could cost $50,000, $100,000 or far more just for storage. National Storage’s offering makes economical sense for people with a lot of items they want to store.

National Storage has steadily grown its underlying earnings per share over the past four years, alongside the distribution. In its latest report the net tangible assets (NTA) per share increased by 5% and the distribution increased by 2.17%.

The current distribution yield is 6.22%

Rural Funds Group (ASX: RFF)

Rural Funds Group is Australia’s only ASX-listed REIT that purely owns agricultural property.

I like Rural Funds as an investment idea because farmland has been a useful asset for a very long time and I imagine it will continue to be useful for a long time to come. In-fact, it should become even more useful as the Australian and global populations increase.

It has a variety of farm types including almonds, macadamias, cotton, poultry, cotton and vineyards.

Management have a goal of increasing the distribution by 4% every year if it can and it has achieved this whilst improving the net rental profit at a faster rate.

Foolish takeaway

I think both of these REITs are very good investment options, but I particularly like Rural Funds which is why I would like to add to my holdings of it.

Another great dividend idea alongside REITs is this top dividend stock.

OUR #1 dividend pick to grow your wealth over the new financial year is revealed for FREE here!

Financial year 2018 is here and The Motley Fool’s dividend detective Andrew Page has revealed his must buy dividend share to grow your wealth in 2018.

You might not know this market leader's name, but it's rapidly expanding into a highly profitable niche market here in Australia. Even better, the shares boast a strong, fully franked dividend that should balloon in the years to come. In other words, we're looking at the holy grail of incredible long-term growth potential AND income you can watch accruing in your account in real time!

Simply click here to grab your FREE copy of this up-to-the-minute research report on our #1 dividend share recommendation now.

Motley Fool contributor Tristan Harrison owns shares of RURALFUNDS STAPLED. The Motley Fool Australia owns shares of and has recommended RURALFUNDS STAPLED. The Motley Fool Australia has recommended National Storage REIT. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.