3 High-Yield REITs That Have Made Me a Ton of Money

• Plymouth Industrial REIT is trading under value right now with a lot of room to grow.
• I bought Federal Realty in the last market crash and was handsomely rewarded by this Dividend King.
• Innovative Industrial Properties has been one of the best money-making investments, and the growth isn’t over yet.

The power of dividend growth is severely undervalued by most investors.

A lot of people flock to high-growth stocks for their potential money-making abilities, but I prefer to invest in high-yielding dividend real estate investment trusts (REITs). Not only do they offer me a passive income stream with above-average returns, but I also gain access to the diverse real estate industry.

Three high-yielding REITs that have made me a lot of money over the years are Plymouth Industrial REIT(PLYM -0.33%), Federal Realty Investment Trust (FRT 1.44%), and Innovative Industrial Properties(IIPR 1.39%). Here’s a closer look at how these REITs made me richer.

Plymouth Industrial REIT

Plymouth Industrial REIT is a fairly young REIT, having gone public in 2017. It remains somewhat under the radar within the industrial REIT sector. Unlike many of its larger peers that focus on class A distribution and logistics centers in the largest metro markets, Plymouth specializes in operating and leasing light industrial, small bay industrial, and logistics and distribution centers in secondary markets, as well as a few select primary markets.

This unique distinction between other industrial REITs gives the company a competitive advantage by having better pricing and less competition. The industrial industry is red-hot right now. Limited supply and record demand have made it a tremendous few years to be in this niche. Rents for the company are up 19.5% year over year so far in 2022.

While the company isn’t profitable just yet, its financials are improving quarter over quarter, and it won’t be long before it’s in net positive for its net operating income (NOI). Plymouth Industrial hasn’t exactly made me rich — yet. Rather, it’s one of my latest purchases that I bought in the stock market dip, and one I think will pay off huge in the long run.

Its dividend payment right now is around 4.7%, which is over three times the dividend return of the S&P 500. Its larger peers are trading at around three times what Plymouth is trading for today. And while its profitability will need to be stabilized before share prices or dividends increase, there’s a huge opportunity for share price and dividend growth over the next 10 years.

Federal Realty

Federal Realty is a retail REIT that specializes in the development, ownership, and leasing of open-air retail centers in popular high-density suburban markets. The retail industry was hit hard by the pandemic, so it’s no surprise that share prices of popular retail REITs like Federal Realty plummeted in the March 2020 crash.

I saw the market plunge as a buying opportunity, as Federal Realty had a tremendous portfolio of 104 shopping centers in nine of the top real estate markets in the U.S., and a super-strong track record to stand behind. By strategically buying when the market was down, I was able to pick up shares in the company at just under $73 a share and get a dividend return of 5.8%.

I ended up selling shares in the company in October 2021 to reallocate my investment into other companies, which netted me a 75% return on investment. However, I wish I would have held the stock for the long haul. The company is one of the few Dividend Kings, with 52 years of consistent dividend increases, meaning I would have surely seen my dividend return grow the longer I held it. Its share prices are down 26% this year, putting its dividend return around 4.5%, so right now is definitely a valuable time to invest.

Innovative Industrial Properties

No REIT better illustrates the power of dividend growth for me than Innovative Industrial Properties (IIP), a REIT that specializes in leasing industrial space to medical marijuana operators. I purchased shares in the company in 2018, which was shortly after its IPO and long before the stock took off as one of the hottest dividend REITs to invest in.

Buying low and getting in before the once under-the-radar stock became popular has allowed me to benefit from dividend payments, share price growth, and dividend increases. Today its dividend return is just over 5%. But when I purchased shares in IIP, the dividend return was only 3.3%. Now, five years and 12 dividend increases later, my return is 23%.

Incredible share price growth where the company rose 893% from the time I purchased it to its peak in 2021 has made me a lot of money. I’ve also been paid $17.72 in dividends for every share owned during the past five years. The dividend payments alone have paid back half of my original investment.

Concern over the U.S. legalization of marijuana and the effect it would have on the company’s business model, as well as a recent class action lawsuit against the company, have caused its price to tank this year. But even with share prices down, I could still walk away with nearly $90 of profit for every share I own for a total return of 298%, not considering dividends. However, the company’s performance remains as strong as ever, and I have no plans of selling this high-yielding REIT anytime soon.