Investing in This REIT Could Make You a Millionaire Retiree

All it takes is one advantageous investment to retire a millionaire thanks to the power of time and compounding interest. It’s how investors who put $10,000 into Amazon a little less than 25 years ago would be sitting on over $21 million today.

Thankfully, Amazon isn’t the only opportunity to make you a millionaire retiree. There are several other worthwhile stocks and real estate investment trusts (REIT) that have massive potential for millionaire status. Here’s why cannabis REIT Innovative Industrial Properties (NYSE:IIPR) could be a great candidate to help you retire as a millionaire. 

A closer look at this millionaire-maker stock

Innovative Industrial Properties is one of the hottest growth stocks in the market today. The company that specializes in the ownership and leasing of industrial real estate to experienced operators in the medical marijuana industry has performed incredibly since its IPO in December 2016. In just a few short years, the company has achieved a 67% return on investment on an annualized basis, which is over double Amazon’s annualized return of 31% during that same time.  Share prices have grown over 1,100% in just over five years. That means investors who put $10,000 into the company at IPO would have grown it into $124,271, . When coupled with the dividends it’s paid during that same time, it’s clear IIPR is well on its way to millionaire-maker status.

IIPR data by YCharts

A unique business model in the cannabis industry

To understand why IIPR has performed so well in such a short period of time, you have to understand its business model. Since medical marijuana is still illegal on a federal level (for now), banks aren’t able to lend to businesses, making it a mostly cash-based business. IIPR saw this as an opportunity to provide liquidity to existing operators, purchasing their industrial property and then leasing it back to them, creating long-term cash flow for the company. This unique structure referred to as a sale-leaseback is the primary driving force for IIPR’s business model, although the company also does some ground-up development as well. Today it has 103 properties and 7.7 million square feet under management across 19 states making it the largest REIT in this space.

Person smiling with money flowing down and around.

Image source: Getty Images.

Growth opportunities aren’t gone

Share prices for IIPR are nowhere near initial IPO levels, meaning investors will likely have to be far more patient than those who got in early to reach millionaire status, but the opportunity is still there. Considering 14 states have yet to legalize medical marijuana, there’s room for expansion into new states. Medical marijuana use is also on the rise, with states like Illinois, one of the 19 states IIPR operates in, seeing more tax revenue being earned from medical marijuana than alcohol in 2021.

Eventually, there’s a strong likelihood that marijuana will be approved for medical use on a federal level, which will open the doors to alternative financing for new and existing operators, which will give IIPR a run for its money. But its unique sale-leaseback structure will likely still be appealing to those who don’t want to go the traditional route of a bank, meaning its business model is far from obsolete. And given that IIPR was the first publicly traded REIT specializing in this niche, it’s a clear pick for patient investors wanting to reach millionaire retiree status.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



Source link

Leave a Reply

Your email address will not be published.