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Here’s a Safe Canadian Health Care REIT for Your TFSA

Investors are pretty passionate about their TFSAs. And rightly so, as this Canadian investment account can provide us with tax-sheltered income today and into the future, as unlike the RRSP, withdrawals are tax-free no matter when they are made.

The TFSA limit is up to $63,500 today, and with the new year fast approaching, we will likely have another $6,000 to add to this limit. So this is a good time to think about what investments to add to our TFSA for long-term, reliable income.

Chartwell: a REIT with staying power

Chartwell Retirement Residences REIT (TSX:CSH.UN) is the largest provider and owner of seniors housing communities, ranging from independent living to long-term care. We know that the population is aging, we know that senior communities are on the rise, and we know that Chartwell has been addressing this market with much success.

Furthermore, with increased life expectancy and a population that is wealthier than ever before, Chartwell’s business is well-positioned to continue to thrive. With retirement residences that offer independence, a wide array of services, and care and support when that is what’s needed, Chartwell is a real and valid choice for seniors looking for living and life solutions.

Occupancy recovering from a bump in the road

Occupancy levels have taken a hit in the last couple of years, and as they were hit down to today’s levels of just below 90% (from levels of well above 90%). New competition from the likes of Revera and Sunrise homes, especially in the Ontario and Quebec markets, have taken their toll. Chartwell believes, as I do, that the increase in demand from the aging population will boost demand so that Chartwell will recover to better occupancy levels.

Expanding the network

Along with increased competition, Chartwell was also hit by reduced occupancy levels in its properties that were recently acquired, newly developed, and that have had significant redevelopment. There are 19 such properties that management expects will achieve a stabilized occupancy level of 95%, boosting results in the quarters to come.

Dividend income galore

Chartwell currently offers shareholders a dividend yield of 4.25%, and is coming off four consecutive years of dividend increases that have been possible because of the solid fundamentals of its business. This positive position starts with the aging population. According to recent statistics, the next 20 years will see the number of Canadians aged 75 to 85 increase at a rate that is three to four times greater than the general population.

Foolish bottom line

Chartwell REIT continues to provide reliable income to investors, and those who have stuck with the REIT over the longer term have also generated substantial capital gains from their investment. Because I like to look at long-term performance, I will point out that Chartwell REIT’s 10-year price return is 137%. This does not include dividends, which have added another almost $6 per share in dividends over this time period, or another approximately 100% return. So total return exceeds 200%.

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Fool contributor Karen Thomas has no position in any of the stocks mentioned.

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