You want a Tax-Free Savings Account (TFSA) that hits $250,000 and pays you every month. That’s bold. But it can be done simply with two solid real estate investment trusts (REIT). Ones like Choice Properties (TSX:CHP.UN) and Dream Industrial REIT (TSX:DIR.UN). Both pay monthly distributions, and both recently released strong first-quarter results.
Choice
Choice Properties is Canada’s big grocery-anchored and industrial landlord. In Q1 2025, it reported a net loss of $96.2 million, owing to a non-cash fair-value adjustment. But funds from operations came in at $0.264 per unit, up 1.9% from last year. Cash net operating income (NOI) rose 2.9%, with industrial NOI up 6.1% and retail up 1.5%.
Occupancy remains high at 97.7% across its portfolio. These figures suggest cash flow is stable. The net loss doesn’t affect monthly payments. Distributions grew slightly, reflecting management confidence. That’s a good sign for long-term holders.
Dream
Dream Industrial focuses on warehouses and logistics properties across Canada, the U.S., and Europe. In the first quarter, it delivered FFO of $0.26 per unit, a 5.8% increase year over year, and comparative-properties NOI rose 3.1%. Leasing activity was robust, with 1.5 million square feet newly leased or renewed and healthy rental spreads.
Net income took a hit due to fair-value losses, but that’s common in REIT accounting and didn’t affect cash flow. The trust’s leadership also closed a US$200 million debenture offering and set up interest-rate hedges. The May monthly distribution was $0.05833 per unit, equivalent to about $70 annually, paid every month.
A winning pair
According to recent analyst commentary, Choice Properties is highly rated for reliability and monthly income. Dream Industrial is praised for its industrial momentum and 6%-plus yield. But yields alone can mislead. Both REITs are sensitive to interest-rate trends. If borrowing costs rise sharply, future growth or distributions could be pressured.
Both REITs pay monthly. That adds flexibility. You can take income or reinvest as you see fit. With stable tenants and strong leasing activity, both are credible candidates for a monthly paying income core. And right now, if you were to invest $237,000, you could create $250,000 immediately in your portfolio!
| COMPANY | PRICE | SHARES | DIVIDEND | ANNUAL PAYOUT | MONTHLY PAYOUT | INVESTED |
|---|---|---|---|---|---|---|
| DIR.UN | $11.75 | 10,075 | $0.70 | $7,052.50 | $587.71 | $118,381.25 |
| CHP.UN | $14.74 | 8,032 | $0.77 | $6,186.64 | $515.55 | $118,381.68 |
| Total | — | — | — | $13,239.14 | $1,103.26 | $236,762.93 |
| With Dividends | — | — | — | — | — | $250,002.07 |
Considerations
Of course, no investment is risk-free. REITs can be hit by a downturn in real estate or if interest rates spike. Choice’s retail exposure brings tenant risk. Dream’s industrial portfolio is global, adding foreign-exchange and political risk. Distributions could be reduced if cash flow falters. That’s the trade-off for yield.
Still, these trusts show discipline. Choice keeps occupancy tight and invests in intensifying properties around Loblaw locations. It has strong liquidity and maintains a conservative payout. Dream is growing through leasing, refinancing, and hedging. Recent acquisitions and its debenture issuance speak to proactive management.
If you’re disciplined, reinvest distributions and continue adding new contributions, a $250,000 TFSA is achievable. Reinvest monthly income, top up yearly, and let compounding work. You could reach $250,000 in a few years, while enjoying steady passive income and diversification from two very different property sectors.
Bottom line
Could things go sideways? Absolutely. A deep market correction, severe rate hikes, or unexpected tenant failures could hurt distributions. But long term, these two REITs own pretty resilient real estate: necessity-based retail and industrial logistics. With the right risk tolerance, they seem well-suited to a monthly income strategy.
It’s not rocket science. Buy two tickers, reinvest, and grow. You get income every month and avoid over-diversifying. But keep an eye on occupancy, rates, and payout coverage. Even simple portfolios need some check-ups.
In short, using just these two REITs, you can build toward a $250,000 TFSA with regular monthly cash flow. It’s straightforward, transparent, and built on real-world property. If you value simplicity and income, this duo makes a compelling plan.
