Investing in quality real estate investment trusts (REITs) allows you to benefit from a steady stream of dividend income and portfolio diversification. Generally, REITs own and operate a portfolio of cash-generating properties rented out to tenants. Further, REITs distribute most of these cash flows via dividends to shareholders, creating a low-cost passive-income stream.
So, let’s see how I’d invest $22,000 in Canadian REIT stocks to live off passive income.
Is this TSX REIT a good buy right now?
Granite REIT (TSX:GRT.UN) posted better-than-expected fourth-quarter (Q4) results, driven by strong same-property NOI (net operating income) growth of 6.3% on a constant currency basis.
The REIT reported FFO (funds from operations) per unit of $1.47 in Q4, an 8.9% increase from Q3 and a 15.7% increase year over year. For 2024, FFO per unit grew to $5.44, up 9.5% from 2023. Comparatively, it pays shareholders an annual dividend of $3.4 per share, indicating a payout ratio of 62.5%.
“Over the past three years, our FFO per unit has increased by 38%. That’s an annual growth rate of 11.5%, all while reducing our debt to EBITDA [earnings before interest, taxes, depreciation, and amortization] from 8.1 times to 7.1 times over that period,” highlighted Chief Executive Officer (CEO) Kevin Gorey during the earnings call.
Management remained cautiously optimistic about 2025, forecasting FFO per unit between $5.70 and $5.85, representing approximately 5% to 8% growth. However, they expect occupancy to dip slightly in Q2 before recovering to 95.5% and 96% by the end of 2026.
The trust secured a notable win with a new build-to-suit development in Houston leased to a Fortune 50 company, representing the third phase of their Houston development site. Gorey noted this “displays very strong validation for our site and our location,” with income expected in late 2026.
Regarding leasing activity, Granite reported 400,000 square feet of new leases and one million square feet of renewals in Q4, an average 22% increase over expiring rents. The company renewed nearly 70% of 2025 expiries at an impressive 45% average increase.
Should you own this Canadian REIT stock in 2025?
InterRent REIT (TSX:IIP.UN) delivered a solid Q4 performance with same-property NOI (net operating income) growth of 7.6% and record-setting NOI margins of 67.1% for the full year—the highest in the company’s history. The REIT’s focus on operational efficiency is paying dividends, as evidenced by strong occupancy rates at 97% across its portfolio.
It reported an impressive 9.9% year-over-year increase in FFO per unit in Q4, while adjusted FFO per unit jumped 12.1% to $0.139. Management maintained cautious optimism about rental market conditions, with average monthly rent reaching $1,702 in December, indicating a 6.6% year-over-year growth.
InterRent is strategically pivoting toward capital recycling and has announced plans to sell up to $250 million in non-core assets and generate $140 million in net proceeds. Management indicated that this capital would primarily fund unit repurchases at what they view as deeply discounted prices compared to NAV (net asset value).
InterRent has paused breaking ground on new developments, preferring to allocate capital toward debt reduction and unit repurchases while economic conditions evolve.
The Foolish takeaway
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| InterRent REIT | $10 | 1,100 | $0.10 | $110 | Quarterly |
| Granite REIT | $58.86 | 187 | $0.85 | $159 | Quarterly |
An investment of $22,000 equally distributed in the two TSX stocks would help you generate $1,075 in annual dividend income. Moreover, a cumulative investment of $22,000 in these two REITs a decade back would be worth around $44,000 today after adjusting for dividend reinvestments.
