3 REITs That Print Money Every Month

Canadians have three options to earn passive income. Invest in Automotive Properties stock, Nexus stock, or Dream Industrial stock. All three can provide generous cash flows to would-be investors every month.

| More on:
edit Real Estate Investment Trust REIT on double exsposure business background.

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Real estate investment trusts (REITs) are alternative investments to typical dividend-paying companies. Canadian REITs trade on the TSX, so you can buy or sell them as you would stocks.

For property investors seeking rental income, REITs are substitutes to owning physical properties. The cash outlay is smaller, and you do away with the pressures of a true landlord. On the TSX, three names are reliable income generators; it’s as if they print money every month. You can be a laid-back investor and receive recurring cash flows.

Unique real estate asset class

Automotive Properties (TSX:APR.UN) boasts solid fundamentals and an attractive leasing profile. It’s a niche play, too, as it operates in the automotive retail industry. At $12.83 per share, the REIT pays a 6.32% dividend. Current investors enjoy a 24.4% gain thus far in 2021.

The portfolio consists of 66 income-producing properties where the dealerships or lessees cater to the mass market segments and luxury car buyers. The 32 global brands are primarily European and Asian. The REIT is growth oriented but meticulous when evaluating acquisition opportunities.

Besides the triple-net leases (tenant pays for all related and incidental costs), the weighted average lease term is approximately 12.4 years. Notwithstanding the ongoing pandemic, the REIT reported a 4.34% increase in rental revenue in Q1 2021 versus Q1 2020. Its net income soared 67.19%. Financial performance should improve when the economy fully recovers.

Top-performing industrial REITs

It’s no wonder that Nexus (TSX:NXR.UN) and Dream Industrial (TSX:DIR.UN) are among the most resilient REITs in 2021. Their portfolios are predominantly high-quality industrial properties that are in demand due to the pandemic and e-commerce boom.

Nexus owns and operates 87 income-producing properties, where 52 (60%) are industrial and the rest or 40% are either offices or retail properties. Besides Canada, the REIT is present in select U.S. markets. Dream is more global with 186 industrial assets. The locations are in Canada and U.S., and it has a growing presence in Europe — specifically, in Germany and the Netherlands.

Nexus trades at $10.95 per share (+47.08% year to date) and pays a hefty 6.14% dividend. Dream Industrial’s share price is $16.08 (+25.47% year to date), and it pays a 4.35% dividend. Dream is much bigger in market capitalization ($3.37 billion) than Nexus REIT’s $369.29 million.

In Q1 2021 (quarter ended March 31, 2021), Nexus reported a 6.38% and 8.1% increase in property revenues and net rental income compared to Q1 2020. This REIT is relatively new on the TSX following its graduation from the TSXV on February 1, 2021. The occupancy rate was 94%.

During the same period, Dream’s net rental income was 17.42% higher than in Q1 2020. The occupancy rate is 95.7%, while rent collections have returned to pre-pandemic levels. According to management, Dream did not enter any rent-deferral arrangements since Q2 2020.

Nexus and Dream Industrial are both growth oriented. The former is currently working on some deals and expects to shift further its portfolio weighting towards industrial. Meanwhile, the latter will capitalize on the pipeline of opportunities and deploy capital at a robust pace.


The Bank of Canada is the institution that can decide to print money in the country. However, I used the term here to highlight the ability of three top REITs to provide recurring monthly income streams to would-be investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends AUTOMOTIVE PROPERTIES REIT. The Motley Fool recommends DREAM INDUSTRIAL REIT.

More on Dividend Stocks

energy oil gas
Dividend Stocks

2 High-Yield Energy Stocks to Buy as Recession Approaches

Energy stocks such as TC Energy and Canadian Natural Resources allow investors to generate income even in recessionary times.

Read more »

green power renewable energy
Dividend Stocks

3 Top Dividend Stocks to Drive Your Passive Income

These three high-yielding, safe dividend stocks could boost your passive income.

Read more »

protect, safe, trust
Dividend Stocks

TFSA Wealth: How to Earn $363 in Monthly Passive Income for Life

Canadian investors can harness the power of the TFSA to generate steady tax-free passive income for decades.

Read more »

Canadian Dollars
Dividend Stocks

TFSA Millionaire: How to Turn $40,000 Into $1.2 Million for Retirement

Here's how TFSA investors are using the power of compounding to buy top Canadian dividend stocks to build retirement wealth.

Read more »

edit Balloon shaped as a heart
Dividend Stocks

My 3 Favourite TSX Stocks Right Now

These three TSX stocks are my favourite performers. All have strong dividends, future growth, and historic performance behind them.

Read more »

Dividend Stocks

Passive Income Generator: 1 Dividend Stock Yielding 6.16%

A high-yield energy stock that pays monthly dividends is a reliable passive income generator for investors.

Read more »

Dollar symbol and Canadian flag on keyboard
Dividend Stocks

3 Cheap Canadian Dividend Stocks to Buy Now for Passive Income

Investors seeking quality passive income can now buy top TSX dividend stocks at cheap prices.

Read more »

edit Businessman using calculator next to laptop
Dividend Stocks

2 Oversold TSX Dividend Stocks to Buy for Passive Income

While these high-quality dividend stocks are oversold, they are some of the best stocks to buy for passive-income seekers.

Read more »