Top apartment REITs, residential REITs investment opportunities updated on 2023.
Apartment REITs has one of the highest average annual returns of all real estate investments. Learn all about the possibilities and details of apartment REITs.last updated Friday, May 19, 2023
#apartment reits #best apartment reits 2022
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CONTENTS
Apartment REITs are investment vehicles that offer investors a convenient, relatively safe, and low-cost way of reaping the benefits of owning residential property without taking out a loan. Fortunately, you can invest in apartment REITs in several ways. Along with vital details and tips, this article will highlight the different apartment REIT investment options, both private and public.
Before choosing, based on your investment criteria, the best apartment REIT stocks, you should carefully understand what type of operation the REIT invests in: These are the various investment methods.
Several variations of this model are part of the BRRRR process. The main steps of this process are:
After these regulatory changes, several platforms started offering retail investors private equity real estate funds. These platforms may or may not manage the funds themselves. Sometimes they only filter the funds from other managers (sponsors) and offer them to the public. Still, they have to follow all SEC rules.
Most private equity managers or platforms only offer funds for a limited time until each fund has reached total funding. Therefore, the investment opportunities provided by each manager/platform change over time.
Also, private funds have redemption mechanisms that allow investors to recover their money if needed, but these may be restricted. For example, in many funds, investors can only ask for redemptions once every quarter or once every year. These redemptions may be limited to $50 thousand per request, and the fund may decide not to redeem the investor's shares if liquidity conditions are not ideal.
The platform allows users to choose between as many as ten funds, changing over time. When we checked their offerings, they had two apartment real estate funds: one more balanced income, the other more growth-oriented.
Their platform allows investors to watch every single project for each fund, and funds pay a monthly dividend. However, the only criticism of Fundrise is that their funds can take too much leverage (up to 85% debt financed), which increases risk severely.
One of the most significant advantages of the fund is that it is gigantic. For example, they own 290,000 housing units alone. However, Blackstone REIT also has a liquidity problem. For this reason, it started limiting withdrawals in December 2022.
Today, Bluerock still manages private and public funds and REITs. For example, the Bluerock Total Income Plus Real Estate Fund is a fund of funds that invests in other real estate funds like Blackstone or those managed by Ares, Bain Capital, and Brookfield. However, this fund is not a residential real estate fund because it invests in other real estate assets.
The company also manages a public REIT, the Bluerock Homes Trust (BHM), that invests in single-family rental homes. Single-family houses are not the same as multifamily or apartment properties, but they share several characteristics. As a result, we also include BHM's information in the list of best residential REITs below.
Fortunately, PaperFree solves this information problem with private fund REITs. We scout hundreds of private offerings from private fund managers and sponsors. Then we evaluate them before presenting the best private fund REITs to you. On top of that, we provide you with the information you need to make your own informed decisions.
If you want more information, please feel free to reach out!
Returns calculated for February 2023.
tags: #top apartment reits
*P/E ratio definition. Price to earnings ratio is a way to value a company by comparing the price of a stock to its earnings.
P/E=(Share price)/(Earnings per share)
tags: list of residential REITs, best apartment REITs 2022(23)
Sun Communities provides affordable housing options for retirees, working-class families, and other individuals seeking affordable housing alternatives. The company's portfolio includes over 500 properties with over 180,000 sites, making it one of North America's largest manufactured housing community owners and operators.
In addition to manufactured housing communities, Sun Communities also owns and operates other properties, such as RV resorts and marinas. The company generates revenue primarily from rental income.
The company generates revenue primarily from rental income and property management fees. Mid America Apartment Communities is focused on high-quality properties in urban and suburban markets with strong economic fundamentals. The company has a diversified portfolio of properties, including garden-style apartments, mid-rise and high-rise buildings, and mixed-use communities.
Invitation Homes aim to provide high-quality rental homes to residents seeking alternative homeownership while offering flexibility and convenience. The company's portfolio includes homes of various sizes and configurations, from studios to four-bedroom houses, in suburban and urban locations.
AvalonBay Communities is known for developing and managing high-quality apartment communities in desirable neighborhoods near employment centers, transportation hubs, and entertainment and retail districts. The company's portfolio includes a variety of property types, such as high-rise and mid-rise buildings, garden-style apartments, and mixed-use communities.
Equity Residential's portfolio primarily focuses on high-density urban areas, particularly coastal markets such as Boston, New York, San Francisco, and Southern California. The company's apartment communities offer a variety of amenities, including fitness centers, business centers, and outdoor spaces.
A few exchange-traded funds own shares of REITs. Investing in such ETFs is simple and passive to expose your portfolio in real estate. Barbara picked the best real estate ETFs.here
Paragraph source and Contributor: Forbes Advisor, Barabara Friedberg


REZ iShares Residential and Multisector Real Estate ETF.
REZ index comprises U.S. residential, healthcare, and self-storage real estate equities.
Why invest in REZ? (from fund marketing materials)
Exposure to the U.S. residential real estate sector. Targeted access to a subset of domestic real estate stocks and real estate investment trusts, which invest in real estate directly and trade like stocks. Use it to diversify your portfolio and express a view on a specific U.S. real estate sector.
RESI Kelly Residential & Apartment Real Estate REIT ETF.
Residential & Apartment Real Estate Index seeks to provide total return by tracking a passively managed, concentrated portfolio of companies in the residential & apartment ("multifamily") management and operational services industries.
Why Invest in RESI?
(from fund marketing materials)
Housing is short on supply and high on demand amid a historic and lingering housing shortage resulting from a decade of under-building. The RESI ETF could stand to benefit as the positive effects from the post-pandemic "housing boom" are reverberating across U.S. rental markets, with rents increasing at high rates.
Contact us today. Estimate time to invest online: 7 minutes to get started
Why are apartment REIT investments a good opportunity?
With an average annual return of 10.6%, apartment real estate assets outperform commercial real estate on average by over one percentage point. REITs have an average yearly return of 11.8%. So, when you invest in residential apartment REITs, you opt for a powerful combination of potentially strong returns with a low capital commitment.The types of Apartment REITs
Apartment or residential REITs invest primarily in residential properties and mortgages tied to residential properties. Because residential properties are sometimes multifamily or apartments, residential REITs are also called multifamily REIT and apartment REITs.Before choosing, based on your investment criteria, the best apartment REIT stocks, you should carefully understand what type of operation the REIT invests in: These are the various investment methods.
- Buy to rent. Buy apartments and then rent them to people (this is the most common type of multifamily REIT).
- Invest in a mortgage. Buy the mortgage on an apartment paid by people owning it and living in it (residential mortgage REITs).
- Invest in development. Buy a mortgage or a loan to develop an apartment or multifamily property that is not occupied yet (called commercial residential REITs).
Why Investing in apartment REITs is better than purchasing the property directly
Direct Property Purchasing Profile
- Involvement: High
- Diversification: Low
- Experience required: High
- The minimum investment required: is $100 thousand or more
- Risk: High
- Liquidity: Low
Several variations of this model are part of the BRRRR process. The main steps of this process are:
- Buy a discounted property undervalued due to repairable problems, such as structure damage, poor landscaping, vacancies, or cosmetic issues. Usually, people will get a hard money loan to finance the purchase.
- Renovate the property by repairing it or modernizing it.
- Rent the property
- Refinance by obtaining a longer-term mortgage, usually leveraging even more.
- Repeat the process.
Risks:
Although this seems simple in practice, direct purchase real estate investing carries enormous risks, and we do not recommend it for the following reasons:- Buying, renovating, and managing properties requires extensive experience, which you may not have. Real estate is a competitive market, and people much more experienced than you are looking for the same opportunities. You must manage contractors, sign complicated paperwork, ask for loans, find tenants, etc. At every step, mistakes can cost you thousands.
- It also requires a lot of time on your part unless your partner is going to manage the properties.
- By not diversifying, you are putting all your eggs in one basket. You are committing too much capital and maybe even your net worth into one investment. If that investment goes wrong, you could face challenging financial times.
- Leverage is extremely risky. We cannot stress this enough. Even seasoned investment managers implode because they take excessive leverage. When you take out a loan, minor inconveniences can make you lose all your investment.
- You may face foreclosure if you are counting on rental income to pay the mortgage and your property is temporarily vacant. The same can happen if rates increase so much that mortgage costs are higher than rental income.
- If you have to repay your hard money loan by a specific date, even if you haven't finished renovations or cannot secure a mortgage loan.
- Hard money loans usually carry personal guarantees and recourse covenants, meaning the lender can also go after your other assets.
Investing in apartment real estate private equity REITs
Private equity REITs profile:
- Involvement: Low
- Diversification: High
- Experience required: Normal
- The minimum investment required: varies between $1 thousand and $25 thousand.
- Risk: Middle
- Liquidity: Constrained
Benefits
There are several advantages to investing in real estate private equity funds compared with purchasing a property directly. For example, private funds:- Must register with the SEC (unless available to accredited investors only), providing enormous protection. The fund must report its results periodically, and its financial statements will be subject to audit.
- Usually manage hundreds of millions, if not billions, in assets. They offer significant diversification through the purchase of several properties in different geographies.
- They are generally organized as Real Estate Investment Trusts (REITs). REIT regulation requires distributing at least 90% of yearly income to shareholders. And they usually provide a recurrent dividend payment.
- Have a track history from which managerial ability can be analyzed. Some funds have been in operation for decades. Fund managers are generally well-prepared professionals with significant real estate investing experience.
After these regulatory changes, several platforms started offering retail investors private equity real estate funds. These platforms may or may not manage the funds themselves. Sometimes they only filter the funds from other managers (sponsors) and offer them to the public. Still, they have to follow all SEC rules.
Most private equity managers or platforms only offer funds for a limited time until each fund has reached total funding. Therefore, the investment opportunities provided by each manager/platform change over time.
Risks
Private equity funds may leverage more than comparable public equity funds. They take on debt to increase their returns, but debt increases both returns and risks. When things go south, heavily leveraged funds will suffer more. For example, for a fund leveraged ten times (10x) the equity, a 10% negative return can lead to bankruptcy.Also, private funds have redemption mechanisms that allow investors to recover their money if needed, but these may be restricted. For example, in many funds, investors can only ask for redemptions once every quarter or once every year. These redemptions may be limited to $50 thousand per request, and the fund may decide not to redeem the investor's shares if liquidity conditions are not ideal.
Investment platforms feature private equity REITs
Fundrise
- Minimum initial investment: $1,000
- Commissions: 1% yearly
- Leverage: Up to 85% of assets (5.6x)
- Returns: 8.7% net total compounded.
- Years in operation: 7
The platform allows users to choose between as many as ten funds, changing over time. When we checked their offerings, they had two apartment real estate funds: one more balanced income, the other more growth-oriented.
Their platform allows investors to watch every single project for each fund, and funds pay a monthly dividend. However, the only criticism of Fundrise is that their funds can take too much leverage (up to 85% debt financed), which increases risk severely.
Blackstone
- Minimum initial investment: $2,500 (plus suitability standards like $250k net worth or $70k yearly income)
- Commissions: 3.5% on sales (upfront), 2.1% on servicing yearly, 12.5% on total returns
- Leverage: Up to 60% of assets (1.5x)
- Returns: 11% net and cumulative since its inception in 2017
- Years in operation: 7
One of the most significant advantages of the fund is that it is gigantic. For example, they own 290,000 housing units alone. However, Blackstone REIT also has a liquidity problem. For this reason, it started limiting withdrawals in December 2022.
Bluerock Residential Blackstone
Another currently mentioned name is Bluerock Residential, particularly Bluerock Residential Growth REIT. Since Blackstone Real Estate recently acquired Bluerock Residential Growth REIT, it won't be unusual to find a Blackstone/Bluerock Residential REIT listing shortly.Today, Bluerock still manages private and public funds and REITs. For example, the Bluerock Total Income Plus Real Estate Fund is a fund of funds that invests in other real estate funds like Blackstone or those managed by Ares, Bain Capital, and Brookfield. However, this fund is not a residential real estate fund because it invests in other real estate assets.
The company also manages a public REIT, the Bluerock Homes Trust (BHM), that invests in single-family rental homes. Single-family houses are not the same as multifamily or apartment properties, but they share several characteristics. As a result, we also include BHM's information in the list of best residential REITs below.
Paperfee can bridge the information gap in private fund REIT investments
Information scarcity is one of the primary disadvantages of private funds compared to public funds. The cause of this scarcity is the lack of analysis of information, not the lack of data availability. Plus, private funds are only available for a limited time. Consequently, it makes separating the wheat from the chaff difficult.Fortunately, PaperFree solves this information problem with private fund REITs. We scout hundreds of private offerings from private fund managers and sponsors. Then we evaluate them before presenting the best private fund REITs to you. On top of that, we provide you with the information you need to make your own informed decisions.
If you want more information, please feel free to reach out!
Investing in public apartment REITs
Public apartment REIT profile:
- Involvement: Low
- Diversification: High
- Experience required: Normal
- The minimum investment required: no minimum required
- Risk: Middle
- Liquidity: High (at a cost)
Benefits
At least 20 public REITs operate in the residential real estate space. For most investors, public residential REITs have these attractive characteristics:- She regularly published financial information to the SEC, like private funds offered to non-accredited investors.
- Like private REITs, they must regularly distribute 90% of distributable income.
- They range in size from relatively small ($100 million market cap) to gigantic ($25 billion), leverage from low leverage (0.7x) to middle leverage (3x), and geographic diversification. Public REITs are the largest REITs
- A lot of research on them is freely available on the web.
Risks
However, some caveats come with public residential REITS investments. Public REITs are subject to market downturns or turmoil, like most real estate investments. Panic selling and a turbulent economy can depress these investments until they don't reflect their NAV per share.Public apartment REIT Capital Arrangement
Public residential apartment REITS allow you to invest in small steps, such as adding a small amount to the investment every month. On the other hand, private funds REITs usually have investment windows and expect a one-time lump sum commitment, although some may also accept monthly investments.List of the best apartment REITs 2023, focusing on - investing in residential properties.
Below is a list of the best residential REITs to vest in residential properties, with some of their financial and operating data.Returns calculated for February 2023.
Name | Ticker | Market Cap ($b) |
Leverage | Dividend Yield | 1-year return | 5-year return | 10-year return | Share price | P/E ratio* |
AIMCo. | AIV | 1.15 | 1.2 | 0 | 13.3 | 38.7 | 105.4 | 7.6 | 4.2 |
American Homes 4 Rent | AMH | 12 | 0.7 | 2 | -10 | 81 | - | 34.4 | 58 |
Apartment Income REIT | AIRC | 5.8 | 1.8 | 3.5 | -25 | - | - | 38 | 6.5 |
Armour Residential REIT Inc | ARR | 1.1 | 0 | 21% | -18 | -55 | -59 | 5.8 | 71 |
AvalonBay Communities | AVB | 25 | 0.7 | 3.5 | -25 | 32 | 92 | 180 | 21 |
Bluerock Homes Trust | BHM | 0.1 | 1.3 | - | - | - | - | 19.8 | - |
BSR | HOM.U | 0.56 | 0.7 | 3.5 | -13 | - | - | 15 | 1.7 |
Camden Property | CPT | 13.3 | 0.7 | 3 | -24 | 70 | 160 | 122 | 20.5 |
Centerspace | CSR | 1 | 1.4 | 4.2 | -21 | 57 | 27 | 70 | - |
Clipper | CLPR | 0.11 | 60 | 5.5 | -19 | 7.7 | - | 7 | 60 |
Ellington Residential Mortgage REIT | EARN | 0.1 | 0 | 11.50% | -10 | 30 | - | 8 | 33 |
Elme Communities | ELME | 1.6 | 0.4 | 3.6 | -15 | -20 | 3.3 | 19 | - |
Equity Lifestyle Properties | ELS | 13.5 | 2.4 | 2.3 | -5.2 | 92 | 411 | 72.6 | 48 |
Equity Residential | EQR | 25 | 0.7 | 3.9 | -26 | 32 | 87 | 65 | 21.3 |
Essex Property Trust | ESS | 15 | 1.1 | 3.8 | -29 | 21 | 102 | 230 | 42 |
Independence Realty | IRT | 4.3 | 0.7 | 2.8 | -17 | 174 | - | 19 | 32 |
Invitation Homes | INVH | 20 | 0.7 | 2 | -20 | 68 | - | 33 | 57 |
Mid-America Apartment Communities | MAA | 20 | 0.7 | 2.9 | -17 | 120 | 273 | 172 | 31 |
Next Point Residential Trust | NXRT | 1.3 | 3 | 3 | -34 | 3 | 140 | 51 | 50 |
Sun Communities | SUI | 20 | 0.8 | 2.2 | -15 | 106 | 412 | 159 | 78 |
UDR | UDR | 14 | 1.4 | 3.5 | -21 | 45 | 156 | 43 | 87 |
UMH Properties | UMH | 1 | 2.5 | 3.3 | -19 | 82 | 214 | 18 | - |
tags: #top apartment reits
*P/E ratio definition. Price to earnings ratio is a way to value a company by comparing the price of a stock to its earnings.
P/E=(Share price)/(Earnings per share)
tags: list of residential REITs, best apartment REITs 2022(23)
Apartment REITs by market cap
Name | Ticker | Market Cap ($b) |
AvalonBay Communities | AVB | 25 |
Equity Residential | EQR | 25 |
Sun Communities | SUI | 20 |
Mid-America Apartment Communities | MAA | 20 |
Invitation Homes | INVH | 20 |
Essex Property Trust | ESS | 15 |
UDR | UDR | 14 |
Equity Lifestyle Properties | ELS | 13.5 |
Camden Property | CPT | 13.3 |
American Homes 4 Rent | AMH | 12 |
Apartment Income REIT | AIRC | 5.8 |
Independence Realty | IRT | 4.3 |
Elme Communities | ELME | 1.6 |
Next Point Residential Trust | NXRT | 1.3 |
AIMCo. | AIV | 1.15 |
Armour Residential REIT Inc | ARR | 1.1 |
UMH Properties | UMH | 1 |
Centerspace | CSR | 1 |
BSR | HOM.U | 0.56 |
Clipper | CLPR | 0.11 |
Ellington Residential Mortgage REIT | EARN | 0.1 |
Bluerock Homes Trust | BHM | 0.1 |
The largest residential REITs of 2023
The following is a list of residential REITs with the most significant residential property holdings.Size | Name | Ticker |
XXL | AvalonBay Communities | AVB |
XXL | Equity Residential | EQR |
XXL | Invitation Homes | INVH |
XXL | Mid-America Apartment Communities | MAA |
XXL | Sun Communities | SUI |
Sun Communities, mobile home REIT
Sun Communities (SUI) owns, operates, and develops manufactured housing and recreational vehicle communities throughout the United States and Canada.Sun Communities provides affordable housing options for retirees, working-class families, and other individuals seeking affordable housing alternatives. The company's portfolio includes over 500 properties with over 180,000 sites, making it one of North America's largest manufactured housing community owners and operators.
In addition to manufactured housing communities, Sun Communities also owns and operates other properties, such as RV resorts and marinas. The company generates revenue primarily from rental income.
Mid America Apartment Communities, the Southern REIT
Mid America Apartment Communities (MAA) owns and operates apartment communities in the Southeastern and Southwestern United States. The company's portfolio includes over 100,000 apartment units, making it one of the largest multifamily REITs in the United States.The company generates revenue primarily from rental income and property management fees. Mid America Apartment Communities is focused on high-quality properties in urban and suburban markets with strong economic fundamentals. The company has a diversified portfolio of properties, including garden-style apartments, mid-rise and high-rise buildings, and mixed-use communities.
Invitation Homes, a high-quality single-family rental apartment REIT
Invitation Homes (INVH) focuses on owning and operating single-family homes for rent in the United States. The company's portfolio includes more than 80,000 homes in 16 markets nationwide.Invitation Homes aim to provide high-quality rental homes to residents seeking alternative homeownership while offering flexibility and convenience. The company's portfolio includes homes of various sizes and configurations, from studios to four-bedroom houses, in suburban and urban locations.
AvalonBay Communities, the high-end metropolitan apartment REIT
AvalonBay Communities (AVB) develops, owns, and operates apartment communities in major metropolitan areas in the United States. The company's portfolio includes over 80,000 apartment homes in 11 states and the District of Columbia, making it one of the largest apartment REITs in the United States.AvalonBay Communities is known for developing and managing high-quality apartment communities in desirable neighborhoods near employment centers, transportation hubs, and entertainment and retail districts. The company's portfolio includes a variety of property types, such as high-rise and mid-rise buildings, garden-style apartments, and mixed-use communities.
Equity Residential, apartment community REIT on the east coast and west coast.
Equity Residential (EQR) focuses on acquiring, developing, and managing multifamily residential properties in the United States' urban and high-density suburban areas. The company's portfolio includes over 300 apartment communities comprising more than 77,000 apartment units.Equity Residential's portfolio primarily focuses on high-density urban areas, particularly coastal markets such as Boston, New York, San Francisco, and Southern California. The company's apartment communities offer a variety of amenities, including fitness centers, business centers, and outdoor spaces.
The Best Real Estate ETFs by Barbara Friedberg / March 2023
Name | Type | Ticker |
Vanguard Real Estate ETF | ETF | VNQ |
VanEck Mortgage REIT Income ETF | ETF | MORT |
Goldman Sachs Future Real Estate and Infrastructure Equity ETF | ETF | GREI |
Xtrackers International Real Estate ETF | ETF | HAUZ |
Invesco Active U.S. Real Estate ETF | ETF | PSR |
iShares Residential and Multisector Real Estate ETF | ETF | REZ |
Vanguard Global ex-U.S. Real Estate ETF | ETF | VNQI |


Apartment REIT ETFs for Vannila or Passive Real Estate Investing
Fewer ETFs have been exposed to a specific type of real estate - apartments. Below is a limited number of Multifamily REIT ETFs, with sizeable allocation in the residential sector.REZ iShares Residential and Multisector Real Estate ETF.
REZ index comprises U.S. residential, healthcare, and self-storage real estate equities.
Why invest in REZ? (from fund marketing materials)
Exposure to the U.S. residential real estate sector. Targeted access to a subset of domestic real estate stocks and real estate investment trusts, which invest in real estate directly and trade like stocks. Use it to diversify your portfolio and express a view on a specific U.S. real estate sector.
RESI Kelly Residential & Apartment Real Estate REIT ETF.
Residential & Apartment Real Estate Index seeks to provide total return by tracking a passively managed, concentrated portfolio of companies in the residential & apartment ("multifamily") management and operational services industries.
Why Invest in RESI?
(from fund marketing materials)
Housing is short on supply and high on demand amid a historic and lingering housing shortage resulting from a decade of under-building. The RESI ETF could stand to benefit as the positive effects from the post-pandemic "housing boom" are reverberating across U.S. rental markets, with rents increasing at high rates.
What to do next?
Before you commit any money to any investment, ensure you're making the best decision by doing a thorough research and seeking help from reputable and established real estate investment professionals. Paperfree fits these criteria and can be your platform for strategic and prudent investing in the best apartment REIT stocks.Contact us today. Estimate time to invest online: 7 minutes to get started
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