Interest rates have spiked higher over the last month. The 10-year Treasury yield increased by 12%, moving from 4.7% to 5.25%. When rates increase, investors sell off stocks they think will be hurt by higher rates. Real estate investment trust (REIT) share prices are one of the most affected asset classes.
The Vanguard Real Estate ETF (VNQ), with $42 billion in assets, is the best-known REIT ETF. This fund is down over 10% since late August. Rising interest rates are the sole reason for the decline.
Investors holding high-yield REITs may see price declines and sell out of fear that share prices will keep falling. I talk to my subscribers about a different way to view falling prices.
First, interest rates won’t continue to go up forever, or even for long. The current rise in rates mostly reflects high energy prices. I recently heard from Howard Chan, CEO of Kurv Investments, that oil prices and interest rates have an 80% correlation. When the world returns to a more normal energy supply situation, oil will come down, and interest rates are likely to follow.
I recommend high-yield REITs as part of my strategy of building an income stream. Falling share prices mean the current yields are higher than they were before rates started to increase.
I have been known to say (a lot) that a lower share price is an opportunity to pick up shares “on sale.” Everybody loves stuff on sale, except for stocks. They get scared. Don’t be. Buying more shares when prices are down immediately increases your income stream, and when the prices recover, owning those shares increases your wealth.
Here are two REITs that are growing their dividends and sporting double-digit yields:
Adamas Trust (ADAM) is a finance REIT with a diversified portfolio of residential loans, residential mortgage-backed securities (MBS), and commercial MBS. ADAM has increased its dividend twice this year by a total of 30%. Currently, the shares yield more than 14%.
Milrose Properties (MRP) is an equity REIT that was spun off by Lennar Corporation (LEN) in February 2025. Milrose owns properties that will eventually become sites for new home construction. The company receives monthly payments from homebuilders and full payment when lots are sold for construction. The MRP dividend has grown by 5% over the last year, and the shares yield 11.6%.
"I updated my spreadsheet and it seems illegal."
Financial advisors say you need $1.5M to generate $5,000/month. A revolutionary new investment does it with potentially $150,000... even less in some cases. Kelly G: "I updated my spreadsheet and it seems illegal. The income keeps growing." Transform non-dividend stocks like Apple and Tesla into monthly income machines. Bloomberg reports they're "entering a golden era." Simple as buying a stock. Watch the presentation that shows you all of the steps, click here.
