How to Build Passive-Income Portfolio From Just $15,000

Canadian investors can build a strong passive-income portfolio with some cash and stocks like Artis REIT (TSX:AX.UN).

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Passive income is income that is generated through means other than employment or through money earned as a contractor. Some types of passive income include rental income from an owned property, royalties from a published novel or another creative endeavor, or through online sales of a particular product.

Today, I want to explore how you can build a strong passive-income portfolio through the investment route with just $15,000 to start. In this piece, I want to target real estate investment trusts (REITs) for their dependability and high-income yields. Let’s jump in.

Here’s the first REIT I’d target for our passive-income portfolio in 2023

Automotive Properties REIT (TSX:APR.UN) is the first real estate investment trust (REIT) I want to target for our passive-income portfolio. This Toronto-based REIT is focused on owning and acquiring primarily income-producing automotive dealership properties in Canada. Its shares rose 1.22% on Thursday, June 29.

This REIT released its first-quarter (Q1) fiscal 2023 earnings on May 11. Automotive Properties REIT delivered adjusted funds from operations (AFFO) per unit of $0.229. Meanwhile, rental revenue increased 12% year over year to $22.8 million. Same-property cash net operating income (NOI) rose 2.4% to $16.1 million.

Shares of this REIT closed at $11.59 on June 29. For our hypothetical, we can purchase 400 shares of Automotive Properties REIT for a total price of $4,636. The stock offers a monthly dividend of $0.057 per share. That represents a tasty 6.9% yield. We can now generate monthly passive income of $26.80 going forward.

This REIT offers a big yield right now

Artis REIT (TSX:AX.UN) is a Winnipeg-based REIT with an extensive portfolio of industrial, office, and retail properties in Canada and the United States. Shares of this REIT rose 0.69% in yesterday’s trading session. The stock is down over 35% in the year-over-year period as of close on June 29.

In Q1 2023, Artis REIT saw revenue dip 3.2% year over year to $90.2 million. Moreover, net operating income declined 6.6% to $48.0 million. This REIT closed at $7.21 on Thursday, June 29. We can snag 700 shares of Artis REIT for a purchase price of $5,047. Artis REIT currently offers a monthly dividend of $0.05, which represents a monster 8.3% yield. This purchase will allow us to churn out monthly passive income of $35.

The final REIT I’d target to churn out big passive income

Allied Properties REIT (TSX:AP.UN) is the third and final REIT I want to snatch up today with the remainder of our $15,000 principle. This REIT is a leading operator of distinctive urban workspace in the country’s top metropolitan areas and network-dense urban datacenter space in Toronto. Its shares rose marginally in Thursday’s trading session.

This REIT closed at $21.61 on Thursday, June 29. We can snatch up 245 shares of Allied Properties REIT for a total price of $5,294.45. This REIT offers a monthly distribution of $0.15 per share, representing an 8.3% yield. The investment means we can generate monthly passive income of $36.75 from here on out.

Bottom line


The investments in these high-yield REITs will allow us to generate monthly passive income of $98.55. That works out to an annual passive-income rate of $1,182.60.

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 Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Automotive Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.

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