Worried About the Next Stock Market Crash? Buy Realty Income
The global economy took a huge hit in early 2020 as the coronavirus spread across the globe, leading to a sudden bear market in the United States. Although not immune to the impact, net-lease real estate investment trust (REIT) Realty Income (NYSE: O) continued to pay its monthly dividend without a hitch. It even increased the payment. Dividend investors worried about the next market crash should consider buying Realty Income -- just make sure you understand one key issue.
Realty Income owns single-tenant properties with long-term leases that require tenants to pay most of the expenses of the buildings they occupy. This is known as a net lease, and it's a fairly conservative way to invest in real estate. These transactions end up being more of a financial arrangement than anything else, in which a company with important property looks to raise cash via a sale leaseback. Essentially, in order to maintain access to a vital property, the seller immediately signs a long term lease. The leases usually include regular rent increases.
Image source: Getty Images.
Source Fool.com
