A blended 6.5% yield from dividend-focused ETFs and REITs outperforms rental income from a $720,000 duplex by nearly threefold.
A $720,000 portfolio combining dividend-focused ETFs and REITs generates $46,800 in annual income, nearly triple the $16,420 net rental yield from a comparable duplex after expenses. The portfolio includes Schwab U.S. Dividend Equity ETF (SCHD) yielding 3.5%, Realty Income (O) at 5.1%, and JPMorgan Equity Premium Income (JEPI) at roughly 7.5% through covered calls.
Over the past decade, SCHD delivered a 236% total return, while Realty Income has paid 670 consecutive monthly dividends with 114 quarterly increases. Dividend-growth securities historically outpace flat rental yields, as distributions rising 8% annually double in nine years, preserving purchasing power better than high-yield alternatives that may erode principal.
The comparison highlights the trade-offs between passive dividend income and direct real estate ownership, with the former avoiding tenant management while offering liquidity and diversification.