Realty Income (O 0.18%) has been a very enriching investment over the years. The real estate investment trust (REIT) has delivered an annualized total return of 13.3% to its investors since its public market listing in 1994. That has outperformed the S&P 500's 11.1% annualized total return during that period.

The REIT's strong return -- driven in part by its high-yielding monthly dividend -- makes it a great real estate investment. Here's a look at whether investing $100,000 into the REIT right now -- likely less than what it would take to buy a rental property -- can provide a millionaire-level retirement a decade from now.

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The return potential

As noted, Realty Income has delivered a 13.3% annualized total return since its public market listing more than 30 years ago. If the company delivered that rate of return over the next 10 years, it would grow a $100,000 investment into nearly $350,000. That's well short of the $1 million target. To reach $1 million, the REIT would need to deliver a 13.3% annualized return for 19 years.

Few investments would likely turn $100,000 into a $1 million retirement nest egg in a decade. An investment would need to generate a 26% annualized rate of return to achieve that level of growth, which is rare. For example, only two of the "Magnificent Seven" stocks have delivered an annualized total return of more than 26% over the last 10 years (Tesla and Nvidia).

A longer-term compounding machine

While Realty Income won't provide you with a millionaire-level retirement in a decade, it can help steadily grow your wealth over the long term, largely by increasing its dividend. The REIT aims to pay a durable, steadily growing monthly dividend. It has increased its payout every year since its public market listing, including the past 114 consecutive quarters, growing it at a 4.2% annualized rate.

Investing $100,000 in the REIT today would generate over $420 in monthly dividend income at the current payment rate and dividend yield, or about $5,060 per year. That income should steadily rise each quarter as the REIT raises its dividend. Here's a look at how much dividend income you'd collect by 2036, assuming the REIT raised its payment by 4% per year (and you didn't reinvest your dividends):

Data source: The author. (NOTE: Based on Realty Income's current 5.06% dividend rate.)

Realty Income is in a strong position to grow its dividend. The REIT owns a diversified portfolio of retail, industrial, gaming, and other properties, secured by long-term triple-net leases with many of the world's leading companies. It pays out a conservative percentage of its income in dividends (around 75% of its annual cash flow), retaining the rest for reinvestment. Realty Income also has one of the strongest balance sheets in the REIT sector, supporting new investments.

Not a millionaire-maker, but still a solid investment

Investing $100,000 in Realty Income won't make you a millionaire in a decade. However, the REIT can turn that investment into a lucrative, growing stream of monthly dividend income while steadily increasing the value of its stock by growing its earnings. That makes it a rock-solid long-term investment.