CNBC’s Jim Cramer on Tuesday offered a list of residential mutual funds that stock investors should consider buying to take advantage of rising rents.
“Since higher rents are only good news for landlords, why not just buy a landlord, or at least a piece of a listed landlord? Don’t just be renters, be a renter through one of the residential real estate mutual funds,” said the Mad Money host.
“With rents skyrocketing across America and an uncertain housing crisis due to mortgage rates, you might want to own one of the best apartment REITs,” he later added.
According to the Zumper National Rent Report, median one-room rates rose about 12% year-over-year in March, while two-room rates rose about 14% year-over-year.
Cramer started with the 17 names in the FTSE NAREIT Equity Apartment Index before narrowing down the list to the 10 largest REITs. Then he ranked each name by comparing their numbers for each category:
- Net operating profit growth in the same business
- Projected sales growth
- Estimated funds from operations
- dividend yields
Using those criteria, Cramer identified four winners for investors to keep an eye on.
Here are the four best residential REITs:
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