Have $1,000? Explore This Unique Real Estate Investment for Passive Income and Strong Returns.
Heith Mohler
Tuesday, August 22, 2023
Sun Communities, a real estate investment trust (REIT), has established a successful strategy by focusing on unconventional real estate segments. Rather than traditional apartment buildings and office spaces, the REIT invests in unique properties such as manufactured housing (MH) communities, recreational vehicle (RV) resorts, and marinas. This approach has allowed Sun Communities to experience less competition in the acquisition market, resulting in strong income growth and attractive total returns.
The company's diverse portfolio includes nearly 300 North American MH communities with 100,000 home sites, 55 UK MH holiday parks with 18,000 MH sites, 182 RV communities with 58,000 sites, and 135 marina locations with 48,000 wet slips and dry storage areas. This diversity provides stability and growth in rental income, especially with MH communities that have low turnover due to the cost of relocating manufactured homes.
Sun Communities has consistently demonstrated positive net operating income (NOI) growth over the past two decades, outpacing multifamily-focused REITs and the industry average. This success has translated into a robust and increasing dividend yield of 3.1%, nearly double that of the S&P 500. The company's track record of maintaining or increasing its dividend annually adds to its appeal for investors seeking passive income from real estate investments.
The REIT's expansion prospects remain strong, as it plans to organically grow existing MH communities by around 7,000 sites and expand RV resorts by 9,000 sites. Additionally, the potential conversion of transient RV sites into annual leases could significantly boost revenue. Sun Communities' history of value-enhancing acquisitions, such as Safe Harbor Marinas and Park Holidays, further contributes to its growth strategy. This growth trajectory, combined with its solid dividend performance, has positioned Sun Communities as an attractive investment option for those looking to invest $1,000 for both passive income and strong total returns.
The company's diverse portfolio includes nearly 300 North American MH communities with 100,000 home sites, 55 UK MH holiday parks with 18,000 MH sites, 182 RV communities with 58,000 sites, and 135 marina locations with 48,000 wet slips and dry storage areas. This diversity provides stability and growth in rental income, especially with MH communities that have low turnover due to the cost of relocating manufactured homes.
Sun Communities has consistently demonstrated positive net operating income (NOI) growth over the past two decades, outpacing multifamily-focused REITs and the industry average. This success has translated into a robust and increasing dividend yield of 3.1%, nearly double that of the S&P 500. The company's track record of maintaining or increasing its dividend annually adds to its appeal for investors seeking passive income from real estate investments.
The REIT's expansion prospects remain strong, as it plans to organically grow existing MH communities by around 7,000 sites and expand RV resorts by 9,000 sites. Additionally, the potential conversion of transient RV sites into annual leases could significantly boost revenue. Sun Communities' history of value-enhancing acquisitions, such as Safe Harbor Marinas and Park Holidays, further contributes to its growth strategy. This growth trajectory, combined with its solid dividend performance, has positioned Sun Communities as an attractive investment option for those looking to invest $1,000 for both passive income and strong total returns.
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