How to Build a Monthly Passive-Income Stream With Canadian REITs

These two monthly dividend stocks will create passive income you can live off of for life, and now is the time to buy.

| More on:

Image source: Getty Images

The market is starting to recover, and with interest rates coming down, one of the best places to get in on the action is through real estate investment trusts (REITs). REITs can provide you with monthly passive income as well as returns as the TSX recovers.

Today, let’s look at two REITs investors should consider for monthly passive income and, of course, how much you could get.


First up, we have CT REIT (TSX:CRT.UN). This REIT is associated with Canadian Tire and offers a forward dividend yield of 6.96% as of writing. It has a solid dividend payout ratio of 94%, indicating a sustainable dividend stream. CT REIT’s portfolio is diverse, including retail properties, which helps provide stability.

In terms of its historical performance, CT REIT has a history of consistent dividend payments, which is crucial for investors relying on steady income. This consistency is backed by the strong performance and financial health of its anchor tenant, Canadian Tire. Approximately 90% of CT REIT’s rental income comes from Canadian Tire and its subsidiaries. This high-quality tenant base ensures a low vacancy rate and reliable rental income.

Furthermore, since its inception, CT REIT has shown a steady increase in its asset base and rental income. This growth has been driven by strategic property acquisitions and developments, enhancing its overall portfolio value.

CT REIT’s portfolio includes a wide range of retail properties across Canada. Its properties are strategically located and primarily leased to Canadian Tire, providing a stable rental income stream. CT REIT continues to focus on expanding its property portfolio through strategic acquisitions and developments. This growth strategy aims to enhance its income-generating capabilities and diversify its revenue sources.

SmartCentres REIT

Known for its retail properties anchored by Walmart, SmartCentres REIT (TSX:SRU.UN) provides another strong option. It currently holds a forward dividend yield of 8.47%. Its strong tenant base and strategic property locations make it a reliable option for generating consistent income. And its 103% payout ratio shows it can support a dividend, while also putting cash towards growth.

SmartCentres REIT has a strong track record of consistent dividend payments, supported by its stable tenant base and long-term leases. This reliability is crucial for income-focused investors. Historically, SmartCentres has shown consistent growth in its funds from operations (FFO), which is a key metric for REIT performance. This growth has been driven by strategic property acquisitions and developments, enhancing its overall portfolio value.

The REIT owns and manages a portfolio of retail properties across Canada, including over 3,500 stores. Its properties are strategically located and diversified, reducing risk and ensuring stable income streams. It also boasts stable cash flows underpinned by long-term leases with major tenants. This financial stability supports its ability to pay regular dividends. Add in low debt levels, and it’s a strong investment to consider.

Furthermore, SmartCentres REIT is actively involved in expanding its portfolio through new developments and acquisitions. These projects include mixed-use developments combining residential, retail, and office spaces, which are expected to enhance income streams and diversify the portfolio.

Bottom line

With these two REITs on hand, investors can look forward to both growth and passive income in the coming years. So, how much could a $3,000 investment in both stocks bring in during the next year? CT REIT holds a compound annual growth rate of 8% in the last decade, with SmartCentres at 7%. Here is how much shares could be worth should they reach those levels in the next year.


Investors will have turned their $6,000 investment into $6,445.75, plus dividends. That would create $445.75 in returns and $461.77 in dividends for a total of $907.52 in passive income! That would come to $75.63 each and every month.

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 Amy Legate-Wolfe has positions in Walmart. The Motley Fool recommends SmartCentres Real Estate Investment Trust and Walmart. The Motley Fool has a disclosure policy.

More on Dividend Stocks

edit U-turn
Dividend Stocks

Down 11% From its 52-Week High, Can goeasy Stock Turn Things Around?

Investors looking for value should be drooling at goeasy (TSX:GSY) stock. With a higher dividend and more room to run,…

Read more »

calculate and analyze stock
Dividend Stocks

Sun Life Stock Is Paying $3.24 Per Share in Dividends: Time to Buy the Stock?

Sun Life (TSX:SLF) stock recently bumped its dividend upwards by 4%, creating even more value for investors today.

Read more »

A Canada Pension Plan Statement of Contributions with a 100 dollar banknote and dollar coins.
Dividend Stocks

Retirees: Here’s How to Boost Your CPP Pension

If you hold dividend stocks like Fortis Inc (TSX:FTS) in a TFSA, you'll take home more income than if you'd…

Read more »

A worker gives a business presentation.
Dividend Stocks

3 Safe Dividend Stocks to Own for the Next 10 Years

Given their consistent performances, healthy growth prospects and solid cash flows, these three dividend stocks are excellent buys for the…

Read more »

A bull outlined against a field
Dividend Stocks

The Bullish Market Left These 3 Stocks Behind, But They’re Buys Right Now

The bullish market left Air Canada (TSX:AC) stock behind.

Read more »

grow money, wealth build
Dividend Stocks

2 Ultra-High-Yield Stocks to Buy Hand Over Fist and 1 to Avoid

I have identified two ultra-high-yield stocks that have fallen to their lows despite strong fundamentals because of sector weakness.

Read more »

Various Canadian dollars in gray pants pocket
Dividend Stocks

3 Stocks Under $50 New Investors Can Confidently Buy

Investors looking for strong stocks can be a bit overwhelmed with options. Which is why today we're looking at these…

Read more »

Golden crown on a red velvet background
Dividend Stocks

Cash Kings: 3 TSX Stocks That Pay Monthly

These monthly dividend stocks offer steady and predictable income and high yields, making them attractive to investors seeking regular cash…

Read more »