If you’re wondering how to structure a Tax-Free Savings Account (TFSA) with $14,000 and earn almost constant monthly income, two TSX-listed real estate investment trusts (REITs) stand out. Those are SmartCentres REIT (TSX:SRU.UN) and Choice Properties REIT (TSX:CHP.UN). Both pay monthly distributions and offer stability. Plus, it can give you a steady cash flow inside your tax‑free account.
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The stocks
SmartCentres is a retail‑focused REIT, and it’s trading at about $26 per unit. It has returned around 21.9 % over the past year and 10.9 % over three years. It pays a monthly distribution that adds up to roughly a 7 % yield. Its latest earnings report showed strong fundamentals. In the first quarter (Q1) of 2025, funds from operations (FFO) per unit rose to $0.56 from $0.48 a year earlier. At the same time, same‑property net operating income (NOI) grew by 4.1 %, and occupancy stayed high at 98.4 %. That builds confidence in both the income and stability it provides to investors.
Choice Properties is more diversified. It owns retail, industrial, and mixed‑use properties, trading near $14.70 and has a roughly 5.25 % yield from its monthly payout of $0.064. It has a market cap of around $10.68 billion. Its Q1 report showed FFO per unit grew 1.9 % to $0.264. Occupancy stayed strong at 97.7 %, and same‑asset NOI rose 2.9 % year over year. That makes it reliable for both growth and income.
Creating income
Here’s how I’d structure the TFSA. Add about $7,000 to SmartCentres. That would deliver around $503.20 yearly or roughly $42 per month. Then, allocate the other $7,000 to Choice Properties. With its yield, that brings in about $363 a year or $30 per month. Together, that nets approximately $72 a month in tax‑free cash flow.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND (Annual) | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| SRU.UN | $25.65 | 272 | $1.85 | $503.20 | Monthly | $6,980.80 |
| CHP.UN | $14.79 | 472 | $0.77 | $363.44 | Quarterly | $6,981 |
This combination offers a good balance. SmartCentres brings higher yields from strong retail properties. Choice adds diversification with industrial exposure and slightly lower yield. Both have high occupancy and healthy NOI growth. That means their distributions are supported by solid business performance. The monthly distribution schedule also aligns well with the goal of almost constant income.
Why it works
Monthly distributions are helpful inside a TFSA. Instead of waiting for quarterly payments, you get steady income you can reinvest, cover expenses, or adjust your portfolio monthly. That brings discipline and clarity to your investment strategy.
Of course, REITs come with considerations. Rising interest rates can pressure valuations. Retail‑focused REITs can be impacted by shifts in consumer behaviour. Diversification helps manage this risk. A roughly 50/50 split ensures your portfolio holds steady even if one sector falters. Regular monitoring of earnings and occupancy helps ensure payouts stay on track.
Both SRU.UN and CHP.UN have shown the ability to grow distributions, too. While SmartCentres hasn’t raised distributions this year, its strong FFO gives room for future increases. Choice has paid a steady monthly amount, and the exchange-traded fund (ETF)‑like mix of properties, supports consistent performance.
Bottom line
Over a year, that’s $866.64 of tax‑free income. That’s a solid return on a modest TFSA balance. And it leaves room to top up contributions annually. If your TFSA allows it, you could also add a small safety ETF or cash buffer to balance growth and cash flow.
Splitting $14,000 between SmartCentres and Choice Properties puts together a flexible and reliable income strategy. You get monthly cash flow from strong TSX‑listed REITs. You benefit from diversification across retail and industrial assets. And you enjoy the tax‑free compounding power of a TFSA. If consistent monthly income in a TFSA is your goal, this approach is worth exploring.
