When it comes to building wealth inside a Tax-Free Savings Account (TFSA), consistency is key, and so is reliable income. With $7,000 ready to invest, one of the most dependable monthly cash machines on the TSX right now is Killam Apartment REIT (TSX:KMP.UN). It may not get the attention of flashy tech names, but if you’re aiming for stable income and long-term capital growth, this real estate investment trust (REIT) is worth a close look.
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About Killam
Killam owns and manages apartment buildings across Canada, with a strong focus in Atlantic Canada, Ontario, and Alberta. What sets it apart is its mix of traditional apartments and manufactured home communities. That gives it a defensive edge, especially in uncertain housing markets. When Canadians feel the pinch, like many are right now thanks to rising mortgage renewals and cost-of-living pressures, rental housing tends to see higher demand. People still need a roof over their heads, and more are turning to affordable options.
That brings us to Killam’s most recent financials. In the first quarter of 2025, the REIT reported revenue of $93 million, up 6.6% from $87 million in Q1 2024. Net operating income (NOI) rose to $59 million, compared to $55 million the year before. Funds from operations (FFO), a key metric for REITs, came in at $34.2 million or $0.28 per unit, up from $0.26 a year ago. Occupancy stayed strong at 97.5%, and rent increases in key markets helped boost income.
Killam has also been busy with development, adding more supply to markets where vacancy rates are tight. That’s good news for long-term growth. In fact, Killam expects to complete three development projects this year, which will bring in more cash flow down the line. Meanwhile, its debt levels remain reasonable, with debt-to-normalized adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) improving to 9.7. That’s a healthy number, especially in today’s interest rate environment.
Considerations
Speaking of rates, many investors are still cautious about real estate in general. But unlike retail or office space, residential real estate has proven resilient. People still need to live somewhere, and the supply of rental housing in Canada hasn’t kept up with population growth. Immigration targets remain high, and with home prices still unaffordable for many, renting is becoming a long-term reality for more Canadians. That gives Killam a tailwind that could last for years.
Then there’s the dividend. Killam pays investors monthly, with an annualized payout of $0.70 per unit. At the current price of around $19, that gives it a yield of roughly 3.7%. That’s a solid income stream, especially for TFSA investors who won’t pay tax on the distributions. If you put in $7,000, you’d be earning around $265 a year, paid out monthly and tax-free. That’s not bad, especially when you consider the potential for long-term price appreciation.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY | INVESTMENT TOTAL |
|---|---|---|---|---|---|---|
| KMP.UN | $19.00 | 368 | $0.72 | $264.96 | Monthly | $6,992.00 |
Of course, no investment is perfect. Killam, like other REITs, can be sensitive to interest rate changes. Higher rates can affect property values and make debt more expensive. And while its portfolio is mainly residential, any economic slowdown could affect rental income, especially if unemployment spikes. But for now, demand looks stable, and management has done a good job navigating market changes.
Bottom line
At the end of the day, turning your TFSA into a reliable income generator doesn’t have to be complicated. With strong properties, rising rents, and a steady payout, Killam offers a rare mix of income and stability. You won’t get rich overnight, but you’ll sleep easier knowing your $7,000 is working for you, month after month. And in a time when Canadians are struggling to balance needs and wants, with many pulling back on spending or drawing from investments, having predictable income in your TFSA can provide real peace of mind.
