(PatrioticPost.com)- Landlords to the FBI are bringing in a yield of 6.7%. Real estate investment trusts (REITs) are ideal for investors searching for passive income, according to Yahoo Finance.
REITs are publicly traded companies that use the rent from their properties to pass it on to shareholders in the form of dividends, or yields. Some REITS focus exclusively on renting to a reliable tenant, such as the U.S. government. This includes the FBI. One such REIT is Easterly Government Properties (NYSE:DEA).
While Easterly is not the largest trust out there, its mission is simple: “acquire, develop and manage commercial properties leased to the U.S. government.” Its top three tenants are the Department of Veteran Affairs, the FBI, and the Drug Enforcement Administration as of September 2022. They reportedly contribute 23.8%, 16.5%, and 8.5% to the REIT’s annualized lease income, respectively.
Easterly stated that 98% of its lease income is “backed by full faith and credit of the U.S. government,” making the U.S. government one of the most reliable tenants for landlords who want to enjoy passive income without the burden of tracking down payments.
At the end of the third quarter, Easterly reported that its 86 properties totaled 8.7 million square feet, with 99.3% leased. In July 2021, the company increased its quarterly payout to 26.5 cents per share, translating to a 6.7% yield relative to its current share price.
Contrarians might note that the stock is down 30% over the past 12 months, during the same time that the S&P 500 fell 15%. Easterly has received a “hold” rating from Wall Street analysts and the price target sits at 9.5% higher ($17.25) than where the price is today.
Office Properties Income Trust (NASDAQ:OPI) is another company that rents out to the U.S. government, although not on the same scale. With 162 properties totaling 21.2 million square feet, the U.S. government contributes 19.1% to its annualized rent income. The company lets investors enjoy a quarterly dividend of 55 cents per share and an annual yield of 12.9%.
