The Best Canadian REITs to Invest in This Month

Do you want to own some of the best Canadian REITs? Here are two options that offer growth and insane distributions this month.

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Real estate investment trusts (REITs) are some of the best options on the market for income investors. The market has no shortage of great Canadian REITs to invest in, and many of these are considered must-have additions to any portfolio.

Here’s a look at some of the absolute best Canadian REITs to buy this month.

Forget the mortgage and put your portfolio on autopilot

One of the most tried and tested ways to establish an income stream is from a rental property. Unfortunately, that process is proving to be difficult of late, as the white-hot market, inflation, and rising interest rates take a toll.

While many would-be landlords are priced out of the market, an alternative exists that comes in the form of RioCan Real Estate (TSX:REI.UN).

RioCan is one of the largest REITs in Canada, boasting a massive portfolio of nearly 190 properties. Historically, RioCan has focused on commercial retail properties, but in recent years that mix has shifted more towards mixed-used residential properties.

And it’s those residential units that hold immense long-term potential.

RioCan’s growing residential portfolio comprises mixed-use properties along high-traffic corridors in major metro markets. The residential towers sit atop several floors of retail, providing ample foot traffic and short commutes for dwellers.

Perhaps best of all, investors can earn a healthy monthly distribution that stems from the rent collected from those units. As of the time of writing, RioCan’s distribution works out to a juicy 6.75% yield.

This means investors who drop $20,000 (which is considerably less than a typical downpayment) can expect to generate a monthly income of just over $220.

Keep in mind that there’s no mortgage, property taxes, or tenant maintenance to deduct from that amount. And investors who aren’t ready to draw on that income can reinvest it until needed.

That fact alone makes RioCan one of the best Canadian REITs to own this month.

Here’s another necessity turned REIT to consider

Some of the best investments to buy are those that cater to a necessity and that we interact with daily. Grocers are great examples of this.

It seems only fitting then that Slate Grocery (TSX:SGR.UN) is another option among the best Canadian REITs to consider buying right now.

As the name suggests, Slate is focused on grocery-anchored real estate locations. These sites are more defensive when compared to other non-grocery retailers.

In the case of Slate, the company has over 110 properties within its portfolio, all of which are located across the United States. And like RioCan, the REIT utilizes its stable and growing revenue stream to invest in growth and pay out a very handsome monthly distribution.

As of the time of writing, Slate pays out an insane yield of 10.61%. That’s handily one of the best returns on the market.

This also means that a $40,000 investment in Slate (always as part of a larger, well-diversified portfolio) will generate just shy of $360 each month.

The best Canadian REITs to buy

Both Slate and RioCan can provide a recurring source of income over the longer term. Additionally, both provide some defensive appeal that would do well in any larger, well-diversified portfolio.

In my opinion, one or both of these are some of the best Canadian REITs to own for the longer term.

Buy them, hold them, and watch your long-term income grow.

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 Demetris Afxentiou has no position in any of the stocks mentioned. The Motley Fool recommends Slate Grocery REIT. The Motley Fool has a disclosure policy.

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