For the Landlord Who Manages Three Rentals and Is Done: 3 ETFs That Pay You to Sell and Keep the Income

For the Landlord Who Manages Three Rentals and Is Done: 3 ETFs That Pay You to Sell and Keep the Income

Ryne Mauck

Sat, August 29, 2026 at 12:55 AM GMT+3 5 min read

Quick Read

• Selling rental properties does not mean giving up real estate exposure or income. SCHH, REZ, and VNQI provide access to publicly traded real estate while eliminating the day-to-day responsibilities of being a landlord.

• SCHH and REZ handle the core U.S. exposure in different ways. SCHH offers broad diversification across property types, while REZ provides a more concentrated residential and multisector portfolio that more closely resembles direct rental ownership.

• VNQI adds international diversification, but the transition comes with trade-offs. Investors gain exposure to non-U.S. real estate and greater liquidity, while giving up benefits of direct ownership such as depreciation deductions and 1031 exchanges—and selling existing rentals can trigger capital gains and depreciation recapture.

• Read More: Learn 7 ways to generate income with a $1,000,000+ portfolio (sponsor)

You have painted enough hallways, chased enough late rent checks, and coordinated enough plumbers at 11 p.m. Three doors sounded manageable when you closed on the last one. Now it feels like a second job you never applied for. The good news: you can list the properties, cash out, and still collect rent checks, just through a brokerage account. Three ETFs do most of the heavy lifting: Schwab U.S. REIT ETF (NYSEARCA:SCHH), iShares Residential and Multisector Real Estate ETF (NYSEARCA:REZ), and Vanguard Global ex-U.S. Real Estate ETF (NASDAQ:VNQI).

Selling triggers real tax friction, including capital gains and depreciation recapture, so talk to a CPA before you list. What follows is how each fund fits the after-sale portfolio.

SCHH: Broad U.S. REIT Exposure Without the 2 A.M. Phone Calls

SCHH holds the biggest names in American commercial and residential real estate through one ticker. Top positions include Welltower at 9.6% of net assets, Prologis at 9.0%, Equinix at 4.9%, Simon Property Group at 4.5%, and American Tower at 4.3%. The portfolio spans apartments, single-family rentals, industrial and logistics, retail, self-storage, healthcare, data centers, office, hotels, timberland, and manufactured housing, so you swap concentration risk in three neighborhoods for exposure to hundreds of properties across the country.

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For your rental replacement, note the direct residential holdings: Invitation Homes at 1.17%, AvalonBay Communities at 1.83%, Equity Residential at 1.59%, and American Homes 4 Rent at 0.74%. On income, SCHH pays quarterly, with a trailing 12-month distribution of $0.6607 and an annualized forward distribution of $0.6732 per share. Fund size sits at roughly $9.98 billion in net assets. Year to date, shares are up 15.62%, with a one-year return of 14.05% at a recent price of $23.85.

REZ: The Closest Public Match to Your Rental Portfolio

If SCHH is your diversified anchor, REZ is the fund that most resembles what you already own. It tilts toward residential landlords, senior housing operators, and self-storage, the kinds of tenants and buildings you understand. It carries a net expense ratio of 0.48%, meaning you keep roughly $9,952 of every $10,000 working for you each year.

The income shows up on a quarterly schedule with variable amounts. The latest distribution was $0.5065, the trailing 12-month total is $1.886, and the annualized forward figure is $2.026 per share. At a recent price of $94.90, REZ is up 15.47% year to date and 15.23% over the past year. Over the past decade, shares have returned 94.22% before dividends.

VNQI: Rent From Landlords You Will Never Meet

Your three properties are in one country, likely one city. VNQI fixes that. It holds real estate operators outside the United States, spreading your income across markets that do not move in lockstep with U.S. rates or U.S. housing policy.

VNQI pays once a year, and the checks are lumpy. The most recent distribution, paid December 23, 2025, was $2.1561 per share, up from $2.0404 the prior year. Longer term, annual payouts have swung widely, from $0.2353 in 2022 to $2.8949 in 2021. Total return has been modest recently, with shares down 0.68% year to date and up 0.83% over one year at a recent price of $45.53. You are buying geographic diversification, not momentum.

Trade-Offs to Weigh Before You List

Public REITs are not a clean swap for a rent check. Prices move daily with interest rates and equity markets, so the value of your income stream will bounce in ways a signed 12-month lease never did. Distributions vary quarter to quarter (especially for REZ and VNQI), and you lose the depreciation shield and 1031 optionality that direct ownership provides. Selling three rentals in a single tax year can also produce capital gains and depreciation recapture consequences worth mapping with a CPA before you sign a listing agreement.

The upside is that you keep the asset class, gain diversification across property types and geographies, and never touch a wrench again. The checks keep arriving without anyone selling shares to fund them, which is the whole idea behind a dividend ladder (we laid out how to build one in a free guide here: Never Touch the Principal).

A $1,000,000 Income Portfolio

If you've saved over $1,000,000, this guide is for you. The last thing you want in retirement is to run out of money, you want your money to generate lasting income while you enjoy your life.

Now you can learn the strategies wealthy retirees use to fund their retirement with The Definitive Guide to Retirement Income from Fisher Investments. Download the guide today! (sponsor)

Contact editorial@247wallst.com for any questions or corrections.