3 Top Real Estate Dividend Stocks to Buy for Super Easy Passive Income in June

Source Motley_fool

Investing in real estate can be a great way to make passive income. There are lots of options, including buying a rental property. While investing in rental properties can be lucrative, it requires more work than other strategies.

An easy way to make passive income from real estate is to invest in real estate investment trusts (REITs). These entities own portfolios of income-producing rental properties. REITs distribute most of the rental income they produce to investors via dividends, providing them with effortless passive income. Here are three top REITs to buy this June for super easy passive income.

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Agree Realty

Agree Realty (NYSE: ADC) focuses on acquiring and developing high-quality retail properties that are net leased to financially strong retailers. Net leases provide very stable cash flow because tenants cover all property operating costs, including routine maintenance, real estate taxes, and building insurance. Agree focuses on owning properties leased to financially strong retailers (68.3% of its rent comes from tenants with investment-grade credit) in durable industries (like grocery stores, home improvement, dollar stores, and tire and auto service).

The retail REIT uses the stable cash flows produced by its real estate portfolio to pay a monthly dividend that currently yields over 4%. Agree Realty has grown its payout at a 5.5% compound annual rate over the past decade.

Agree Realty is in a strong position to continue increasing its dividend. It has a low dividend payout ratio for a REIT (72% of its adjusted funds from operations (FFO)). That gives it a nice cushion while enabling it to retain cash to fund additional income-producing retail property investments. The company also has a fortress balance sheet, giving it additional flexibility to buy properties. Meanwhile, it has a long growth runway. Its current retail partners still own over 169,000 properties, providing ample opportunities for Agree Realty to complete additional sale-leaseback transactions.

Prologis

Prologis (NYSE: PLD) is one of the world's largest REITs. It has a leading global portfolio of logistics properties, which it leases to high-quality tenants under long-term contracts. Those leases provide it with steady and growing rental income from embedded rate escalation clauses. That stable cash flow supports the REIT's nearly 4%-yielding dividend, which it pays quarterly.

While Prologis' leases escalate rents, demand for warehouse space has been strong in recent years, supporting faster market rent growth. That's providing the REIT with opportunities to sign new leases at higher market rates as legacy ones expire. The company expects this catalyst to drive healthy net operating income growth for its existing portfolio over the next several years.

On top of that, Prologis has one of the strongest balance sheets in the entire REIT sector. That gives it robust financial flexibility to invest in development projects and make acquisitions. In addition to developing warehouses, Prologis is using some of its vast land bank to build data centers.

The company's growth drivers should enable it to continue increasing its dividend at an above-average rate. Prologis has delivered 13% compound annual dividend growth over the past five years, beating the S&P 500 (5%) and REIT sector average (6%).

Mid-America Apartment Communities

Mid-America Apartment Communities (NYSE: MAA) is one of the U.S.'s largest apartment landlords. It owns over 104,000 apartment homes across 16 states, predominantly in the fast-growing Sun Belt region. Its rental property portfolio produces steadily rising rental income, which supports its nearly 4%-yielding dividend.

The REIT has paid 125 consecutive quarterly dividends throughout its history as a public company. It has never suspended or lowered its dividend payment. Instead, it has a more than 30-year record of dividend stability and growth.

MAA should be able to continue increasing its dividend in the future. In addition to the rent growth of its existing apartment communities, the REIT invests money to enhance and expand its portfolio. It has invested $657.3 million into seven properties (three acquired last year and four it developed) that are currently in the lease-up phase. It's spending another $851.5 million across seven more development projects that it expects will stabilize over the next few years.

The REIT plans to start three to four more projects this year. In addition, it will spend money to upgrade older units, which makes them more appealing to renters, enabling the company to charge higher rents. With a top-tier balance sheet, MAA has plenty of financial flexibility to execute its investment plans.

Easy ways to cash in on real estate

REITs make it very simple to enjoy the passive income generated by real estate. Top REITs like Agree Realty, Prologis, and MAA own high-quality real estate portfolios and have top-notch financial profiles, enabling them to pay lucrative and growing dividends as they expand their portfolios. With more income growth likely in the future, they are great REITs to buy this June to easily collect passive income.

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Matt DiLallo has positions in Mid-America Apartment Communities and Prologis. The Motley Fool has positions in and recommends Mid-America Apartment Communities and Prologis. The Motley Fool recommends the following options: long January 2026 $90 calls on Prologis. The Motley Fool has a disclosure policy.

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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