Rental costs have soared in recent years, making housing less affordable for many Americans. The rising expenses present a significant financial burden, highlighting the need for alternative income sources. One viable option is high-yield dividend stocks, which offer investors a regular revenue stream that can help mitigate monthly rental payments.
Recent reports indicate that national average rents currently hover around $2,100 per month, substantially higher than they were over a decade ago. Historical data shows rental prices have increased consistently, making it challenging for many to meet these costs. Additionally, a Harvard University study reveals that nearly half of American renters spend over 30% of their income on housing, exacerbating the financial strain. This situation mirrors the economic conditions that led to the popularity of Jimmy McMillan’s slogan, “the rent is too damn high,” during the 2010 NYC mayoral race. The current economic landscape, marked by inflation and stagnant wages, underscores the need for reliable income sources.
Rent Crisis and Income Supplementation
The persistent rise in rental costs underscores the importance of finding supplementary income sources. High-yield dividend stocks emerge as a practical solution, providing a steady stream of revenue. According to Wellington Management, high-yield dividend stocks have outperformed other asset classes from 1930 to 2022, making them a compelling choice for investors seeking to offset their rental costs.
Realty Income and Modiv Industrial
Realty Income, known as “The Monthly Dividend Company,” exemplifies the benefits of high-yield dividend stocks. Founded in 1969, this real estate investment trust (REIT) has declared 650 consecutive monthly dividend payments. It regularly increases payouts every quarter and invests primarily in single-tenant commercial properties. This strategy ensures a reliable income stream for its shareholders. Realty Income’s investments in various sectors, including grocery and convenience stores, contribute to its financial stability.
Modiv Industrial, another REIT, focuses on single-tenant industrial properties. Despite a cautious acquisition strategy earlier this year, Modiv Industrial made a strategic $5.8 million purchase in April, enhancing its portfolio. The company emphasizes the importance of strategic investments to maximize capital deployment. Modiv Industrial’s robust dividend yield of 7.8% annually makes it an attractive option for investors seeking regular income.
High-yield dividend stocks offer a viable means to supplement income amid rising rental costs. Realty Income and Modiv Industrial exemplify the potential of these investments, providing consistent and increasing payouts. Investors should consider incorporating such stocks into their portfolios to create a steady revenue stream. This approach not only assists in meeting monthly rental payments but also serves as a long-term financial strategy.
