How to Generate Nearly $2,000 in Passive Income by Investing $30,000 in Dividend Stocks

Top Dividend Stocks for Passive Income

Investors seeking passive income could love these REITs. Investing in real estate is a well-established method of generating passive income. But it comes with some downsides.For example, you might need a significant amount of upfront money. Your rental property might not be as liquid as you'd prefer. You could also incur a myriad of recurring expenses, including property taxes, insurance, and maintenance.

1. Crown Castle

Crown Castle (NYSE: CCI) ranks as the largest communications infrastructure provider in the United States. The company owns more than 40,000 cell towers, roughly 115,000 small cell nodes, and close to 90,000 miles of fiber. With its dividend currently yielding 6%, investing $10,000 (one-third of the initial $30,000) in Crown Castle would give you $600 in annual passive income.Crown Castle is admittedly in a transitional period. It continues to search for a new CEO. Revenue has fallen due to the cancellation of cell tower leases related to T-Mobile's acquisition of Sprint.

2. Innovative Industrial Properties

Innovative Industrial Properties (NYSE: IIPR) (IIP) is the only REIT focusing on the regulated U.S. cannabis industry that trades on the New York Stock Exchange. Few REITs can boast of as impressive a track record of dividend hikes as IIP. Buying $10,000 of its shares would give you $741 in annual income at that level.But the future for cannabis operators could be improving. Wall Street is also generally bullish about IIP's prospects with an average 12-month price target reflecting an upside potential of nearly 25%.

3. W.P. Carey

W.P. Carey (NYSE: WPC) ranks among the largest REITs specializing in commercial real estate. The REIT had a great streak of dividend increases going until it slashed the dividend by nearly 20% in late 2023. With the dividend now yielding 6.19%, an investment of $10,000 would generate $619 in annual passive income.Commercial real estate has been a rough market to be in since the COVID-19 pandemic lockdowns.

Two Risks to Note

• Possible dividend cuts in the REITs
• Market volatility that may impact stock prices

Investing $30,000 in these top dividend stocks offers potential passive income but requires careful consideration of risks and market conditions for long-term financial success.