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everal friends and family members who own rental properties have expressed frustration with the lack of passive income they receive due to unexpected repair costs and difficult tenants. To mitigate these issues, hiring a property manager can be helpful, but it comes at the cost of reduced profits.

    A more appealing option is investing in high-yield dividend stocks that offer a similar sense of owning real estate without the headaches. For example, investing $90,000 in Realty Income (O 0.82%), Ares Capital (ARCC -1.25%), and Blackstone Secured Lending Fund (BXSL -0.99%) could generate over $7,000 in annual passive income.

    Realty Income is a real estate investment trust (REIT) that owns over 15,600 properties across the US and Europe, paying a monthly dividend with a forward yield of 5.67%. A $30,000 stake would generate around $1,701 in annual income. The company has increased its dividend for 30 consecutive years, making it an attractive investment.

    Ares Capital is the largest publicly traded business development company (BDC), offering a forward dividend yield of 8.6% and generating $2,580 in annual passive income from a $30,000 investment. Its diversified portfolio includes 550 companies across various industries, with no single client making up more than 2% of its total revenue.

    Blackstone Secured Lending Fund is another BDC that offers a forward dividend yield of 9.25%, generating $2,775 in annual income from a $30,000 investment. With the financial backing of Blackstone, it boasts high earnings quality and credit quality, as well as low expenses. Its investments are primarily first-lien, senior secured debt, reducing its risk.

    Investing in these three stocks could provide a total annual passive income of over $7,000 from a $90,000 investment, making them an attractive alternative to traditional rental properties.