Best Real Estate Stocks

Owning a single rental property is great. But what if you could get most of the advantages of real estate investing by simply choosing the best real estate stocks for your portfolio? Real estate stocks are stocks related to the real estate market -- they might be real estate investment trusts (REITs), homebuilders, or real estate companies, but they are all in the industry.

There are many advantages to owning real estate stocks over real property, especially when it comes to eliminating the hassle of hands-on management. But there are a lot of real estate stocks to choose from, too. So, how can you even begin to pick among them?

3. Lennar

Lennar (LEN -0.06%) is one of the largest builders of single-family homes in the U.S. It reported revenues of $35.4 billion in 2024 after delivering more than 80,000 homes during the calendar year. It also has had a solid year so far with $8.81 billion in revenues for the three months ended Aug. 31, 2025, and almost $25 billion in the first nine months of the year.

Although building homes is its primary focus, Lennar also offers Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) home loans to its homebuyers through its subsidiary Lennar Mortgage. It also offers title insurance and closing services in 18 states.

Homebuilders are seeing a dip in demand from 2025, and that's apparent in Lennar's revenues. However, the company is stepping up its multifamily game, increasing those revenues from $93 million in the three months ending Aug. 31, 2024, to $228 million in the three months ending Aug. 31, 2025.

Due to its willingness to experiment, Lennar has generally carried decent debt-to-asset ratios. In November 2024, it had $41.3 billion in assets versus $13.3 billion in liabilities. This ratio has slightly increased as of Aug. 31, 2025, with Lennar holding $34.9 billion in assets and $12.1 billion in liabilities, but remains under 35%.

LGI Homes (LGIH -0.35%) is a growing mid-sized builder that focuses its efforts and marketing on first-time homebuyers. For the year ending Dec. 31, 2024, the average price of a home produced and sold by LGI was $365,394. That's a significant discount from the median existing-home price of $419,300 in the fourth quarter of 2024, according to the Federal Reserve Bank of St. Louis.

Pricing alone gives LGI a distinct advantage in its market, but that's not the whole story behind the company. LGI finished 2024 with $3.7 billion in assets and $1.7 billion in liabilities. Despite the rocky environment for homebuilders, LGI has also seen a decline in contract cancellations in 2024 of 22.8%, to a rate below that of 2022, which was 24.4%.

Between December 2013 and December 2024, LGI grew from eight markets in four states to 36 markets in 21 states -- and it continues to build steam.

5. Equity Residential

The bottom line

There are plenty of ways to invest in real estate besides owning physical real estate assets. For many investors, real estate stocks can make all the best parts of owning real estate much more accessible and far less expensive. Whether you're interested in investing in apartment REITs or the builders who construct owner-occupied neighborhoods, there are lots of offerings on the table.

When evaluating real estate stocks, remember that many of the same rules apply as they would for any kind of stock. Look for companies with great offerings, whether it's leasable real estate or purchasable housing stock.

Make sure they aren't carrying a high level of debt that could become a serious liability in a downturn. The better they are at managing their money, the better off you'll be. And, if the management team happens to own a big chunk of the company, that's pretty solid evidence they're invested in making their company succeed by tying their own futures to that success.