Real estate remains one of the most common ways investors generate passive income. While direct property ownership requires active management, publicly traded real estate investment trusts (REITs) offer a more hands-off alternative.
Some REITs distribute dividends monthly rather than quarterly, providing investors with more frequent cash flow. For income-focused investors, that structure can help cover routine expenses or supplement retirement income.
Here’s a closer look at three well-known REITs that currently pay monthly dividends — and how they generate their income.
Realty Income
Realty Income is one of the largest publicly traded REITs by market capitalization. The company owns a diversified portfolio of properties across retail, industrial, gaming, and data center sectors.
Most of its properties operate under long-term net lease agreements, meaning tenants are responsible for property taxes, insurance, and maintenance. This structure typically produces stable and predictable rental income.
Realty Income distributes roughly three-quarters of its adjusted funds from operations (AFFO) to shareholders as dividends and retains the rest to reinvest in new properties. The company is also known for maintaining a relatively strong balance sheet within the REIT sector.
The company has increased its dividend for more than three decades, including over 100 consecutive quarterly increases.
EPR Properties
EPR Properties focuses on “experiential” real estate — including entertainment venues such as theaters, eat-and-play locations, and recreational attractions.
Like Realty Income, EPR typically uses net lease structures, providing steady rental income from operating tenants.
The company distributes approximately 70% of its available cash flow as dividends and reinvests the remainder to grow or reposition its portfolio. In recent years, EPR has sold select properties and redeployed capital into assets it believes offer stronger long-term performance.
The company increased its monthly dividend modestly last year as its portfolio stabilized following pandemic-related disruptions in the experiential real estate sector.
Healthpeak Properties
Healthpeak Properties specializes in healthcare-related real estate, including outpatient medical facilities, laboratory properties, and senior housing communities.
The company leases its properties to health systems and life sciences tenants, sectors that have shown steady demand in recent years.
Healthpeak is currently restructuring parts of its portfolio, including plans to separate its senior housing assets into a standalone entity. It has also shifted capital toward outpatient medical and lab properties, which management views as long-term growth areas.
The REIT currently maintains a monthly dividend and has indicated that future growth in rental income could support additional increases over time.
Comparing Monthly Dividend Income
Income-focused investors often compare REIT dividend yields with broader market alternatives. For example, broad-market index funds tied to the S&P 500 typically generate lower dividend yields than high-yielding REITs.
However, higher yields often come with sector-specific risks, including interest rate sensitivity, tenant performance, and property market conditions.
As with any income investment, total return — including price fluctuations — should be considered alongside dividend yield.
Key Considerations Before Investing
While monthly dividend REITs can provide steady cash flow, investors should evaluate:
-
Dividend sustainability relative to cash flow
-
Debt levels and balance sheet strength
-
Tenant quality and lease terms
-
Exposure to economic cycles
-
Interest rate environment
REITs can be particularly sensitive to changes in borrowing costs, as they often rely on debt financing to acquire properties.
The Bottom Line
Monthly dividend REITs offer a structured way to generate recurring income from real estate without direct property ownership. Companies such as Realty Income, EPR Properties, and Healthpeak Properties have built portfolios designed to support consistent distributions.
However, investors should weigh income potential against market risks and diversification needs before committing capital.
