7 days left! 2 REITS I’m thinking of buying before the ISA deadline

Individuals who buy UK shares in a Stocks and Shares ISA have just seven days to use this year’s allowance. I am personally looking for the best real estate investment trusts (or REITs) to buy before the clock runs out.

I don’t have to buy shares before the April 5 deadline. Simply putting the money in this tax wrapper for later use is enough to use up the £20,000 allowance.

But I don’t feel like I have to wait. There are many above London Stock ExchangeListed REITs that look too cheap to miss after recent stock market volatility.

Please note that tax treatment depends on the individual circumstances of each client and may change in the future. The content in this article is provided for informational purposes only. It is not intended to be, nor does it become, any form of tax advice. Readers are responsible for conducting their own due diligence and seeking professional advice before making any investment decisions.

2 REITs on my radar

I believe REITs are a great way to make extra passive income. In exchange for certain tax benefits, the company must pay at least 90% of the annual profit from the rental operation by way of dividends.

With this in mind, here are the top two REITs I recommend buying today.

PRS REIT

Paying the rent or mortgage is one of the few things that people have to pay despite the recession. This makes it PRS REIT (LSE:PRSR) is a reliable dividend payer at all points in the economic cycle.

In fact, the outlook for this particular segment is improving despite the UK’s struggling economy. This is due to the imbalance of supply and demand which has caused the housing rent to skyrocket.

The number of residential rental properties available has tripled in 18 months, Zoopla recently told the BBC. This in turn pushes rents for new tenants up to 11%.

Rents look set to continue to rise as well, as housing activity cannot keep pace with population growth.

PRS REIT has effectively capitalized on these favorable market conditions. Net rental income and adjusted earnings rose 20% and 31% in the six months to December.

The dividend yield on this UK stock is 5.2%. I would buy it even if the change in rental regulations could benefit me later.

Ediston Property Investment Company

Invest in stocks related to retail like Ediston Property Investment Company (LSE:EPIC) carries a higher risk than normal. Owners of these retail parks may struggle to collect rent as consumer spending power declines.

According to Kantar Worldpanel, grocery price inflation hit a record high of 17.5% in the four weeks to March 19. This equates to £837 less in the household’s pocket each year, which also affects consumer demand for non-essential goods.

But despite this, I’m still considering buying Ediston shares for my portfolio. I expect profits here to increase over the next decade as retailers prioritize expansion into retail parks. The rise of click-and-collect, coupled with a wider choice of goods and easy access by car, means that this segment of UK property should continue to grow rapidly.

I’m also attracted to Ediston because of its 7.8% forward dividend yield. In fact, I think the business can be a great purchase for market-beating, long-term passive income.