You’ve heard it from Warren Buffett, your banker, and maybe even your bartender…

Invest in real estate.

#-ad_banner-#But before you take out a mortgage to buy your dream home (or spend your next paycheck on a fixer-upper in Detroit), right now may not be the best time. 

Even though mortgage rates remain near all-time lows, there’s a shadow over the U.S. housing recovery — and even the Federal Reserve may be unable to do much about it.

In the past, it wasn’t uncommon for new college graduates to be able to buy a home soon after graduating. Although the next generation of potential homebuyers is finding it easier to obtain a job as unemployment rates drop, they’re expected to be saddled with crushing loads of student debt for years to come.

In addition, nearly a third of the owners of the most affordable homes in the U.S. are underwater, meaning they owe more than their properties are worth. That means fewer low-priced homes for first-time homebuyers to choose from. 

So what happens when you have a booming economy full of young would-be homeowners who can’t afford to buy? They rent.

As an avid reader of Nathan Slaughter’s High-Yield Investing advisory, I’ve become a fan of investing trends that can lead not just to growth but also consistent income. 

If you’re like me, you probably can’t afford to go out and buy a 3,000-unit apartment property. Not only that, but you probably don’t want to deal with the taxes and headaches of becoming a landlord.

That’s why I want to tell you about a company that’s found itself in the middle of this huge growth trend… and it’s done all the hard work for you.

Forbes magazine recently published its annual list of the fastest-growing U.S. cities. These cities are struggling to keep up with the demands of newcomers looking to rent places to live — and the company I want to tell you about is well positioned in eight of these 10 cities.

The 10 Fastest-Growing U.S. Cities

I’m talking about Camden Property Trust (NYSE: CPT), an apartment real estate investment trust (REIT) with more than 180 communities in the United States.

Yield-hungry investors are often attracted to REITs because they are required to distribute at least 90% of their taxable profit to shareholders in the form of dividends. CPT’s 3.8% yield tops the apartment REIT sector average of 3.55%. 

Even better, Camden has hiked its dividend payout almost 50% since 2010, to an annual payout of $2.64 a share. Based on the company’s recent performance, there’s a strong case for that rising dividend payout to continue.

Camden’s stock is up more than 20% this year, and the REIT is coming off of an upbeat quarterly earnings report that paints a positive outlook for years to come.

The $6.2 billion company surprised Wall Street as first-quarter earnings per share (EPS) of $1.05 beat the consensus forecast by a penny. Camden credited better than expected occupancy rates for the outperformance. While 13.7% of Camden’s residents moved out in the first quarter to become homeowners, that figure was a notable drop from 15.5% in the previous quarter. 

The trends in Camden’s revenue and earnings since the Great Recession are encouraging: 

CPT Annual Data

EPS came in at $3.82 last year, a huge reversal from a loss of $0.80 a share in 2009. The company has managed to boost revenue 70% since then, to more than $737 million, and net income has more than tripled.

A look at Camden’s locations shows why this company could have huge growth potential for years to come:

Camden Locations
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With more than 63,000 units in its portfolio, Camden had an impressive 95.7% occupancy rate at the end of the first quarter. The company currently operates 51 properties in Texas, with a property in Austin set to open in June.

Outside of new construction, the company is always looking for ways to expand. In 2013, Camden Properties purchased three communities and has nearly half a billion dollars in projects under development.

Analysts have been impressed with Camden’s growth, with Imperial Capital recently raising its target share price more than 14% to $78, 11% upside from today’s prices. The company also holds a respectable credit rating of BBB+ from Standard & Poor’s.

However, if you’re more comfortable diversifying your portfolio across multiple REITs, consider the iShares Residential Rel Est Capped (NYSE: REZ) exchange-traded fund. CPT accounts for roughly 3% of this ETF’s portfolio. REZ pays a 3.5% yield and is up more than 17% this year.
 
Risks to Consider: Although Camden has a made great recovery from the Great Recession, REITs like this are vulnerable to major economic downturns. In general, REITs are also vulnerable to rising interest rates, but for apartment REITs like CPT, that risk is offset by rising mortgage rates, which tend to keep would-be homebuyers renting longer.

Action to Take –> CPT offers a great way to gain exposure to the nation’s fastest-growing apartment markets while collecting a respectable yield. While the double-digit upside expected by analysts is a reachable goal, CPT will really shine if it can keep boosting its dividend — which looks likely, based on the company’s growing revenue and long-term growth prospects.

My colleague Nathan Slaughter has been pounding the table for months now, telling readers of his High-Yield Investing advisory about the enormous opportunity in real estate. And thanks to stocks like CPT, regular investors have a chance to get in on the action. To learn more about Nathan’s absolute favorite picks in real estate, click here to read his special report.