Summary: Hotel real estate investment trusts (REITs) pool funds from various investors to own and manage income-producing properties, providing an opportunity for individuals to tap into the lucrative world of hotels. The most convenient way to invest in hotel REITs is through a reputable brokerage platform, such as eToro.
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About hotel REITs
Investing REITs can generate returns through dividends and capital appreciation as, in this case, the underlying hotels generate revenue. This type of investment allows individuals to participate in the hospitality sector without having to manage the day-to-day operations of a hotel.
Top 5 hotel REITs
Thanks to thorough research, we’ve come up with our top 5 hotel REITs worth considering this year. They include:
- Marriott International (NASDAQ: MAR);
- Vici Properties (NYSE: VICI);
- MGM Resorts International (NYSE: MGM);
- Hilton Grand Vacations (NYSE: HGV);
- Apple Hospitality REIT (NYSE: APLE).
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
Marriott International
Marriott International is a global leader in the hospitality industry, boasting a diverse portfolio of well-known brands. As a hotel REIT, Marriott offers investors exposure to a range of properties, from luxury resorts to budget-friendly accommodations. Also, with a solid track record and a global presence, Marriott is a top choice for those looking for stability and growth potential in their hotel REIT investments.
Your capital is at risk.
Vici Properties
Vici Properties stands out as a unique player in the hotel REIT space, focusing on owning and leasing gaming, hospitality, and entertainment destinations. This REIT has a strategic partnership with Caesars Entertainment, adding a layer of stability and growth potential to its portfolio. Furthermore, Vici’s diverse holdings make it an attractive option for investors seeking a blend of hotel and entertainment assets.
Your capital is at risk.
MGM Resorts International
MGM Resorts International is a well-established name in the gaming and hospitality industry. As a hotel REIT, MGM offers investors the chance to capitalize on the popularity of its resorts and casinos. With a strong brand presence and a commitment to innovation, MGM Resorts is also positioned to provide investors with both income and potential appreciation in the coming years.
Your capital is at risk.
Hilton Grand Vacations Inc.
Hilton Grand Vacations Inc. specializes in vacation ownership, offering investors exposure to the timeshare and vacation ownership segment of the hospitality market. Being a hotel REIT, Hilton Grand Vacations provides a unique angle for investors looking to diversify their portfolio within the broader hospitality sector. The company’s focus on luxury vacation experiences also adds a touch of exclusivity to its offerings.
Your capital is at risk.
Apple Hospitality REIT
Apple Hospitality REIT focuses on acquiring and owning upscale, select-service hotels across the United States. With a commitment to delivering consistent and reliable income to investors, Apple Hospitality REIT stands out as a stable choice in the hotel REIT landscape. Furthermore, the company’s portfolio includes well-known brands, ensuring a level of familiarity and trust for potential investors.
Your capital is at risk.
How to invest in hotel REITs: Step-by-step
If you’re looking to invest in one of the hotel REITs that we’ve just mentioned, you can follow this simple step-by-step guide for a smooth and convenient process.
Step 1: Choose a broker
To start investing, you’ll need to choose a reputable online broker. When it comes to hotel REITs investing, our go-to broker is eToro, a popular platform with more than 30 million registered accounts that offers a host of solid investment features, such as:
- Commission-free stock trading;
- Access to over 2,000 stocks from 17 different exchanges;
- The option to purchase fractional shares;
- Charting tools;
- 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. Other fees apply. For more information, visit etoro.com/trading/fees.
-
Copy top-performing traders in real time, automatically.
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eToro USA is registered with FINRA for securities trading.
Step 2: Fund your account
After selecting a broker, the next step is to fund your investment account. This typically involves linking your bank account to the brokerage platform and transferring funds. Nevertheless, ensure that you understand the deposit process and any associated fees.
Step 3: Place your order
Once your account is funded, navigate to the platform’s trading interface. Search for the hotel REIT of your choice (e.g., search for Marriott International by typing MAR) and place your order. Keep in mind that you can choose to buy a specific number of shares or set specific conditions for your purchase.
Pros and cons of investing in hotel REITs
Pros
- Stable income: Hotel REITs often distribute a significant portion of their income to investors in the form of dividends, providing a reliable income stream;
- Diversification: Investing in hotel REITs allows for diversification within the real estate sector, offering exposure to different types of properties and locations;
- Professional management: REITs are managed by experienced professionals, sparing individual investors from the responsibilities of property management.
Cons
- Sensitivity to economic conditions: Hotel REITs can be sensitive to economic downturns, as decreased travel and tourism can impact the hospitality industry;
- Interest rate risks: Rising interest rates can negatively affect the valuation of REITs, potentially leading to lower stock prices;
- Market volatility: Like any investment, hotel REITs are subject to market fluctuations, and the value of your investment may go up or down.
Common mistakes to avoid when investing in REITs
- Ignoring due diligence: Failing to research and understand the specific hotel REIT you’re interested in can lead to poor investment decisions;
- Neglecting diversification: Investing all your funds in a single hotel REIT can expose you to unnecessary risks. You should, instead, diversify your portfolio to spread risk;
- Underestimating economic factors: Economic conditions can significantly impact the performance of hotel REITs. So, stay informed about economic trends and their potential effects on the hospitality industry.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about hotel REITs
Are there hotel REITs?
Yes, hotel REITs exist and offer investment opportunities in the hospitality sector.
Which hotel REIT is the largest?
Host Hotels & Resorts Inc. holds the title of the largest publicly traded hotel REIT globally, boasting a varied portfolio of luxury and upscale hotels situated throughout the United States.
What is the performance of hotel REITs?
Hotel REIT performance varies, but many have shown resilience, providing stable income through dividends and potential for capital appreciation. Investors should assess specific REITs based on their financial health and market conditions.
Are hotel REITs a good investment for beginners?
Yes, hotel REITs can be a suitable investment for beginners, especially those interested in real estate. However, thorough research and understanding of the market are crucial before making investment decisions.
What are the best hotel REITs right now?
Currently, some top hotel REITs include Marriott International (NASDAQ: MAR), Vici Properties (NYSE: VICI), MGM Resorts International (NYSE: MGM), Hilton Grand Vacations Inc. (NYSE: HGV), and Apple Hospitality REIT (NYSE: APLE). These companies are recognized for their strong performance and diverse portfolios in the hospitality industry.
How often do hotel REITs pay dividends?
Hotel REITs typically pay dividends quarterly, but the frequency may vary. Therefore, check the specific REIT’s dividend payment schedule for accurate information.
Can I invest in hotel REITs through a retirement account?
Yes, many brokerage platforms allow investors to include REITs in retirement accounts such as IRAs (Individual Retirement Accounts) or 401(k)s.
