Planning for retirement can feel like an overwhelming task, especially when market volatility and inflation eat into your hard-earned savings. But what if you could turn your Tax-Free Savings Account (TFSA) into a steady, tax-free income stream without constantly watching the market? That’s where dividend-paying real estate investment trusts (REITs) come in, specifically, NorthWest Healthcare Properties REIT (TSX:NWH.UN). With a high dividend yield and a unique focus on healthcare infrastructure, this Canadian dividend stock could be just what long-term investors need to build a retirement powerhouse.
The stock
NorthWest Healthcare Properties REIT owns and manages a global portfolio of healthcare real estate. From medical office buildings to hospitals and research facilities, it provides essential infrastructure for health services in Canada, Germany, the Netherlands, Brazil, Australia, and New Zealand. This international footprint gives it some insulation from local economic swings while maintaining a dependable tenant base. The bulk of its tenants are hospitals, outpatient clinics, and other health-related operators with long-term leases. That adds stability to its cash flows and supports consistent dividends.
As of writing, the REIT pays a monthly distribution of $0.03 per unit, which works out to about $0.36 per year. At a recent share price of around $4.76, that gives it a very attractive yield of approximately 7.55%. That’s far higher than the average TSX stock. What’s even better is that those payments can land in your TFSA, where they grow completely tax-free. Over time, that adds up, especially if you reinvest the payouts.
Let’s say you invest $20,000 into NWH.UN in your TFSA today. In 10 years, without even contributing more, you could have over $30,000 working for you just from the reinvested dividends alone. Now, imagine what happens if you continue to contribute annually. With time and discipline, your TFSA becomes a powerful tool for generating retirement income.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| NWH.UN | $4.82 | 4,149 | $0.36 | $1,493.64 | Monthly | $19,982.18 |
Considerations
Of course, no stock comes without risk. NorthWest has had a tough couple of years. In 2023 and into 2024, it faced investor concerns about debt levels, rising interest costs, and portfolio divestitures. Its share price fell sharply from highs near $13 back in 2022. But while the drop hurt in the short term, the REIT has taken steps to strengthen its financial position. In its most recent first-quarter (Q1) 2025 earnings report, NorthWest reported revenue of $434 million and continued progress on refinancing and portfolio optimization. The company has been selling non-core assets and focusing on stabilizing its debt load.
More importantly, the demand for healthcare services isn’t going anywhere. With aging populations in Canada and Europe and with growing health spending in countries like Brazil and Australia, the long-term need for medical infrastructure is strong. Hospitals still need buildings. This makes healthcare real estate one of the most defensive sectors in the market.
In addition to its stable income and sector resilience, NWH.UN trades at a discount. With a price-to-book ratio below 0.6, investors are getting the dividend stock for less than the value of its real estate assets. That means there could be potential for price recovery if the market warms up to its turnaround strategy. Even if it takes time, you’re still earning that 7.55% yield in the meantime, paid monthly.
Bottom line
If you’re serious about building your TFSA into a long-term income engine, a stock like NorthWest Healthcare Properties REIT deserves your attention. It offers high yield, dependable monthly income, and access to a global portfolio of essential real estate. While it’s not without risk, the upside for patient investors is compelling. And with your dividends sheltered from tax inside a TFSA, you can let your income and your nest egg grow faster. That’s the kind of retirement planning that works quietly, efficiently, and without drama — just the way it should be.
