The need for decent income is rising with Australia's interest rates going lower and lower.
Someone with $1 million in the bank would be lucky to make $20,000 a year from their capital these days.
ASX dividend shares could be the only good option, but the income has to be reliable. Here are three great ideas:
Brickworks Limited (ASX: BKW)
At today's pre-open price, Brickworks has a grossed-up dividend yield of 4.25%. It hasn't decreased its dividend for decades, it has either decreased or maintained the dividend each year. In FY19 Brickworks increased the dividend by 6%, comfortably more than inflation.
It could be the perfect time to buy Brickworks shares because the Australian housing construction market is turning a corner. The US brick industry, which Brickworks bought into with three acquisitions, also looks very promising for the long-term.
Brickworks' dividend is supported by the net rental it receives from its 50% stake of a property trust and its large holding of Washington H. Soul Pattinson and Co. Ltd (ASX: SOL) shares.
Arena REIT No 1 (ASX: ARF)
Arena REIT has a FY20 distribution yield of 4.8% and it has increased its distribution every year since it started paying in 2013.
I think Arena is one of the best REITs because it invests in 'social infrastructure' like healthcare buildings, early learning properties and it owns three specialist disability accommodation properties.
This property mix, with rental increases built in, long rental contracts and 100% occupancy, has been great for consistent growth of operating earnings.
Duxton Water Ltd (ASX: D2O)
Duxton Water has a grossed-up dividend yield of 5.9%, it has increased its dividend each year since it started paying dividends in 2017.
Duxton Water is a company that purely owns water entitlements. It's benefiting from Australia's hot and dry weather with water entitlement values rising significantly, although a rainy year would probably see water values reduce.
Water values can keep rising for the long-term as more high value crops are planted like almonds that require a lot of water.
Foolish takeaway
Each of these dividend shares have attractive dividend yields and good prospects. At the current prices I'd probably go for Brickworks, I think the market is discounting its building product businesses too much.
