My goal today is to find the best dividend-paying stocks and exchange-traded funds (ETFs) to buy on the London stock market. Here are three I’d snap up for passive income with cash to invest.

The REIT

Real estate investment trusts (REITs) can be great buys for dividend income. In exchange for certain tax breaks, they need to distribute at least 90% of annual rental profits out to shareholders.

Supermarket Income REIT (LSE:SUPR) is one such trust on my radar. Its 12-month trailing yield is a whopping 8.3%. By comparison, the average yield on FTSE 100 shares sits way back at 3.6%.

As the name suggests, this property stock focuses on the food retail sector. This can have multiple advantages for investors. Stable demand for edible goods mean rent collection remains strong across the economic cycle.

Furthermore, Supermarket Income lets its properties to large and financially robust companies like Tesco and Sainsbury. This provides it with added earnings (and thus dividend) visibility.

The company is vulnerable to any interest rate changes, particularly when levels rise. But with UK inflation falling to three-year lows of 1.7%, this threat looks to be less severe in the short-to-medium term at least.

Please note that tax treatment depends on the individual circumstances of each client and may be subject to change in future. The content in this article is provided for information purposes only. It is not intended to be, neither does it constitute, any form of tax advice.

The ETF

With a 12-month trailing yield of 5.7%, the iShares Euro Dividend UCITS ETF (LSE:IDVY) has recently provided bigger dividends than most UK shares.

The fund is invested in 30 of the highest-yielding companies in the eurozone. To give you a flavour, some of its largest holdings are Dutch bank ABN Amro, Spanish energy supplier Endesa, and French communications giant Orange.

As an investor, this diversification provides significant advantages. It means that the overall return I make isn’t dependent upon one single business, industry, or geography.

This can make it a more secure source of passive income than investing in individual shares. That said, with 58.5% of its capital tied up in financial stocks, dividends could still potentially be in jeopardy during economic downturns.

Still, its huge yield and low price-to-earnings (P/E) ratio makes it an attractive investment in my book. Its earnings multiple is just 8.7 times.

The eurostar

Continuing the continental theme, I think Schroder European Real Estate Investment Trust (LSE:SERE) might be another great dividend buy. The dividend yield here is currently an impressive 7.2%.

This is another REIT, meaning it also must pay the lion’s share of profits out in dividends. With eurozone economic conditions improving and inflation dropping, now could be a good time to consider buying in.

Schroder invests primarily in retail, office, and industrial properties in what it describes as “winning cities and regions“. We’re talking about the likes of Berlin, Paris, and Hamburg — places with high growth, rising populations, strong employment, and good infrastructure. This suggests its properties could be excellent long-term investments.

Returns here could disappoint if eurozone economies experience fresh stress. However, the trust’s exposure to different countries and sectors helps reduce the risk to investors, making it an attractive stock to consider.