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5 Apartment REITs to Invest in 2024

apartment REITs
Marko Marjanovic

Summary: Apartment REITs present an accessible and potentially profitable investment option for those looking for long-term growth opportunities and steady passive income. To buy residential REITs stocks and gain exposure to the real estate market without owning any real estate directly, investors can register an account with a reputable online stock trading platform such as eToro.

Highly Rated Stock Trading & Investing Platform

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eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

What are apartment REITs?

Since investing in REITs means you will not own any actual real estate, apartment REITs stocks provide easily accessible exposure to the real estate market and potentially offer stable dividends without the hassle of having to manage the property yourself. 

Where to buy apartment REITs stocks

Apartment REITs companies are listed on a number of online stock trading platforms, each designed to meet the requirements of various types of investors. Therefore, it is important that you conduct some research and compare various platforms to find one that lists your desired stocks and also aligns with your preferred investment strategies. 

Our go-to broker for apartment REITs stocks is eToro:

  • Commission-free stock trading;
  • Access to over 2,000 stocks from 17 different exchanges;
  • The option to purchase fractional shares;
  • A user-friendly platform that simplifies the trading experience.

Highly Rated Stock Trading & Investing Platform

  • Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

  • 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.

  • Copy top-performing traders in real time, automatically.

  • Regulated by financial authorities including FCA and FINRA.

2.8 Million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

Top 5 apartment REITs stocks to buy in 2024

Investing in apartment REITs stocks can be a solid investment strategy, especially for those looking for steady, passive income. However, since the REITs market is rather sensitive to a number of factors that govern the prices of real estate, careful consideration of your investment options is paramount. Below, we have an overview of some of the most promising apartment REITs stocks based on market caps and current market trends. 

The top 5 apartment REITs to consider in 2024:

  1. AvalonBay Communities (NYSE: AVB);
  2. Equity Residential (NYSE: EQR);
  3. Invitation Homes Inc. (NYSE: INVH);
  4. Mid-America Apartment Communities, Inc. (NYSE: MAA);
  5. Essex Property Trust (NYSE: ESS).

1. AvalonBay Communities (AVB)

The first on our list is AvalonBay Communities, a successful residential REIT company known for its focus on apartment communities, especially in the coastal regions (hence the name). AvalonBay enjoys a strong portfolio of directly or indirectly owned 294 apartment communities, with a total of almost 90,000 apartment homes. 

The company has a presence in metropolitan areas, including New England, the New York area, Northern and Southern California. Consequently, investors potentially stand a good chance to benefit from the company’s focus on upscale apartments in high-income residential areas and tourism-heavy locations. 

AvalonBay Communities stock price today


2. Equity Residential (EQR)

Equity Residential is an S&P 500 constituent and another well-known apartment REIT firm with a solid presence in most major REIT markets. However, it mainly focuses on running luxury apartment properties in popular urban and suburban locations and has ownership stakes in over 30 properties, encompassing a total of more than 80,00 apartment units. In light of positive growth reports for 2023, Equity Residential is well-positioned to grow in the properties sector, so keeping an eye on the stock is advised. 

Equity Residential stock price today


3. Invitation Homes (INVH)

Invitation Homes is a part of the S&P 500 index and stands as one of the leading single-family home leasing enterprises in the US. More specifically, it seeks to accommodate quickly evolving lifestyle preferences by offering clients access to top-notch, modern housing near convenient job locations and educational institutions. Moreover, the company prides itself on being committed to delivering personalized service.

Invitation Homes stock price today


4. Mid-America Apartment Communities, Inc. (MAA)

Another S&P 500 constituent, Mid-America Apartment Communities is a well-established apartment REIT operating primarily in the southern and southeastern US, as well as the Mid-Atlantic regions. This REIT has a robust portfolio of middle- and high-income earning rental properties in thriving markets. Mid-America Apartment Communities is predicted to remain stable in 2023 with continuous demand for its quality rental units and strong management practices in place. You can bank on this stock for potential growth and income.

Mid-America Apartment Communities stock price today


5. Essex Property Trust (ESS)

Essex Property Trust focuses on the acquisition, development, redevelopment, and management of multifamily apartment communities in the West. It boasts a strong portfolio in wealthy regions, including San Francisco, Seattle, and Southern California, and has ownership stakes in over 250 apartment communities, totaling more than 62,000 apartment homes. Consequently, it expects to generate stable income in the foreseeable future and capitalize on the demand for rental units in more dynamic markets.

Essex Property Trust  stock price today


What to consider when buying apartment REITs stocks

Some key metrics to consider when evaluating REITs companies include:

  • Funds from operations (FFO): FFO is a measure of a REIT’s performance and cash flow and an indicator of the company’s financial performance that goes beyond profitability and includes depreciation and amortization of real estate assets. In short, high FFO values often translate to higher dividends for investors;
  • Sensitivity to market cycles: The real estate market can be affected by factors like economic uncertainty, fluctuating rental rates, housing market trends, etc. However, since there is a consistent demand for housing of some sort, especially in densely populated and metropolitan areas, apartment REITs can perform relatively well even when the market is adverse. Nonetheless, caution is advised;
  • Types of real estate: Some companies focus on class B properties, which are older and require more maintenance. Others, on the other hand, concentrate on newly built properties or niche markets (e.g., student housing). 

In short, apartment REIT stocks can be a way to gain exposure to the residential real estate market and potentially generate income through dividends. However, only by evaluating key metrics like FFO and understanding the types of properties managed by your chosen REIT can you make informed decisions about whether these stocks may be a good addition to your portfolio or not.

Pros and cons of buying apartment REITs stock

Pros

Pros

  • Diversification: Investing in apartment REITs can give you exposure to the real estate sector without having to buy individual properties. Thus, REITs are a solid way to diversify your portfolio;
  • Liquidity: REIT stocks tend to enjoy high liquidity. In other words, you can buy and sell them relatively easily;
  • Passive income: REITs distribute a sizable portion of their taxable income to shareholders in the form of dividends. Consequently, they present a good investment opportunity for those looking to generate passive income. 
Cons

Cons

  • Risk: Like all stocks, REITs are sensitive to market fluctuations;
  • Interest rates: REITs are also sensitive to interest rate changes. That is, when interest rates go up, REITs prices may also increase;
  • Limited control of the property: When you invest in REITs, you do not own any actual real estate. Instead, you rely on a company to make decisions, which can affect prices;
  • Management costs: Management fees and other real estate expenses can also affect prices;
  • Market sensitivity: In a bad economic environment, real estate prices are among the first to suffer.

Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.

FAQs about apartment REITs stocks

What are REIT dividend taxes like?

REIT dividends are usually subject to the same kind of taxes as ordinary income.

How to invest in apartment REITs stocks safely?

To reduce the risks linked with apartment REITs investments, you can take some precautions. For example, you can diversify your portfolio by investing in some other assets, stay informed about market developments, evaluate the company you are investing in by assessing its fundamentals, etc.

What are the best apartment REITs stocks to buy in 2024?

Some of the most profitable apartment REITs companies in 2024 include AvalonBay Communities (AVB), Equity Residential (EQR), Invitation Homes Inc. (NYSE: INVH), Mid-America Apartment Communities, Inc. (MAA), and Essex Property Trust (ESS);

Highly Rated Stock Trading & Investing Platform

  • Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.

  • 0% commission on buying stocks - buy in bulk or just a fraction from as little as $10.

  • Copy top-performing traders in real time, automatically.

  • Regulated by financial authorities including FCA and FINRA.

2.8 Million Users
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. eToro USA LLC does not offer CFDs, only real Crypto assets available. Don’t invest unless you’re prepared to lose all the money you invest.

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