Sunbelt & Suffering

They call it passive income. Which is a lovely phrase, isn’t it? Like the income just… drifts into your account on a gentle breeze. As if money weren’t a constant, low-grade anxiety, something to be hoarded and worried over. My aunt Mildred, bless her, tried passive income once. It involved raising miniature goats for their cashmere. It was neither passive, nor particularly lucrative. I’m told this REIT thing, Mid-America Apartment Communities, is different. Supposedly.

The pitch is simple enough: you become a landlord without the actual… landlording. No midnight calls about leaky faucets, no awkward confrontations over late rent, no peeling wallpaper that haunts your dreams. Just… dividends. It’s the dream, really. A little slice of someone else’s rent check arriving each quarter. I suspect there’s a catch, of course. There always is. But I’m willing to entertain it, mostly because the alternative is another hour spent untangling Christmas lights.

Mid-America owns a staggering 103,614 homes, mostly apartments, scattered across the South and Southwest. They call it the “Sunbelt.” I call it a demographic inevitability. Everyone is fleeing the cold and the cost of living, and someone has to house them. It’s a bit like watching a slow-motion migration of beige furniture and vaguely optimistic life choices. They rent these places out, collect the money, and then, crucially, they pass a healthy chunk of it on to us, the shareholders. Ninety percent, in fact. It’s almost… generous. Or, at least, legally required. I’m choosing to see it as generosity.

They’ve been doing this for nearly thirty years, and they’ve raised their dividend for the last fifteen. Which, in the world of corporate finance, feels like a minor miracle. Most companies can barely commit to a consistent coffee order, let alone a long-term payout plan. At the moment, it’s $6.08 a share. Which, let’s be honest, isn’t going to fund a yacht. But it is enough to cover my monthly subscription to that bird-watching magazine I don’t really read.

Their cash flow is down a bit, apparently, but they still have some money in the bank. Which is reassuring. It’s like knowing your neighbor has a spare tire, even if you suspect they’ve never changed one. And revenue is inching upwards, slowly but surely. They have a gross margin of 30% and a net profit margin of almost 26%. Numbers. They mean something, I think. I’ve stopped trying to understand them completely. It gives me a headache.

The Growth Opportunity (Or, Where Everyone Is Moving)

It turns out, the South is booming. Who knew? Apparently, people are flocking to states like South Carolina, North Carolina, Texas, and Utah. It’s like a reverse gold rush, only instead of panning for gold, people are searching for affordable housing and slightly warmer winters. Mid-America is right in the middle of it, owning properties in all these places. It’s a bit predatory, if you think about it. But then, so is capitalism. I’m trying not to think too hard.

South Carolina, up 1.5% (apparently, people really like peaches)
North Carolina, up 1.3% (good barbecue, I’m told)
Texas, up 1.2% (everything is bigger in Texas, including the population)
Utah, up 1% (I suspect a lot of national parks)

They also have properties in Arizona, Nevada, and Tennessee. The entire region is growing. It’s a self-fulfilling prophecy, really. More people move there, which drives up demand for housing, which attracts more investment, which… well, you get the idea. It’s a bit like watching a balloon inflate. Eventually, it’s going to pop. But until then, it’s a pretty good ride.

They have a 4.5/5 rating on Google, which is apparently the highest among their peers. I’m skeptical of online reviews, of course. But it’s better than nothing. It suggests that at least some of their tenants aren’t actively plotting revenge. They’re projecting a 6.3% compound annual growth rate over the next five years, and a 5.1% shareholder return. These projections are, of course, based on a series of assumptions that could easily be proven wrong. But hey, what doesn’t involve a little bit of wishful thinking?

The share price is down 8.7% in the last year, but who cares? I’m not buying this stock for a quick profit. I’m buying it for the dividend. For the illusion of passive income. For the small, quiet satisfaction of knowing that someone, somewhere, is paying rent on a property I indirectly own. It’s a pathetic little victory, but I’ll take it. Consider becoming a landlord by proxy. Just don’t expect it to be glamorous.

2026-02-06 03:13

The Growth Opportunity (Or, Where Everyone Is Moving)

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