How to Build the Ultimate Passive-Income Portfolio With $25,000

Canadians can look to construct a super passive-income portfolio in a TFSA with dividend stocks like Sienna Senior Living Inc. (TSX:SIA) and others.

Passive income is a type of unearned income that investors can generate in many ways. Some of the most popular avenues to generate passive income include rental income, money earned from a published work like a novel, revenue from an online retail outlet, or cash raked in from a YouTube channel.

Today, we’re going to sidestep these avenues and focus on churning out passive income through publicly traded dividend stocks on the TSX. In this hypothetical, we are going to play with $25,000. Moreover, I want to snatch up dividend stocks in a Tax-Free Savings Account (TFSA) to create the ultimate passive-income portfolio. Let’s jump in.

Here’s the first stock I’d scoop up to build our passive-income portfolio

Sienna Senior Living (TSX: SIA) is a Markham-based company that provides senior living and long-term-care (LTC) services in Canada. Shares of this dividend stock have dropped marginally month over month as of close on June 14. The stock is still up 4.5% in 2023. Investors can see more of its recent performance with the interactive price chart below.

This company released its first-quarter (Q1) fiscal 2023 earnings on May 11. Same-property net operating income (NOI) increased 9.9% to $34.7 million. Long-term-care (LTC) occupancy rose to 96.8%.

Shares of Sienna closed at $11.54 on Wednesday, June 14. In our hypothetical, we can snatch up 720 shares of this dividend stock for a purchase price of $8,308. This stock offers a monthly dividend of $0.078 per share. That represents a superb 8.1% yield. This purchase allows us to generate monthly passive income of $56.16 in our TFSA.

This REIT is worth targeting for its impressive yield

Allied Properties REIT (TSX: AP.UN) is a Toronto-based real estate investment trust (REIT) that is a leading operator of distinctive urban workspace in Canada’s major cities and network-dense UDC space in Toronto. This REIT has moved up marginally month over month as of close on June 14. Its shares are down 8.1% in the year-to-date period.

In Q1 fiscal 2023, Allied Properties REIT delivered rental revenue growth of 14% to $138 million. Meanwhile, operating income also jumped 14% to $77.1 million. Moreover, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) climbed 12% to $102 million.

This REIT closed at $22.76 on June 14. For our scenario, I’d look to purchase 365 shares for a total of $8,307.40. Allied Properties REIT currently offers a monthly distribution of $0.15 per share, which represents a very tasty 7.9% yield. The purchase will allow us to churn out tax-free monthly passive income of $54.75 going forward.

One more stock that can round out our passive-income portfolio in 2023

Timbercreek Financial (TSX: TF) is a Toronto-based mortgage investment company that provides shorter-duration structured financing solutions to commercial real estate investors in Canada. Shares of Timbercreek have dropped 4.2% month over month as of close on June 14. The stock is still up 1.5% in the year-to-date period.

This dividend stock closed at $7.40 on Wednesday, June 14. We can look to round out our passive-income portfolio by purchasing 1,130 shares of Timbercreek for a purchase price of $8,362. The stock currently offers a monthly distribution of $0.058 per share, representing a monster 9.3% yield. This means we can generate monthly passive income of $65.54 in our TFSA.

Conclusion

These investments will allow us to generate tax-free monthly passive income of $176.45. That works out to an annual passive-income payment of $2,117.40.

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCY
SIA$11.54720$0.078$56.16Monthly
AP.UN$22.76365$0.15$54.75Monthly
TF$7.401,130$0.058$65.54Monthly

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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