Buying real estate in Canada can feel impossible for most individual investors. The good news is you don’t need a massive mortgage to become a landlord. Since 1993, investors have been able to buy units in Real Estate Investment Trusts (REITs), which are companies that own large portfolios of properties and pay out a share of the rent income they collect through regular (monthly) distributions.
But where do you start? If you have $1,000 in your TFSA or RRSP, you don’t have to pick just one Canadian REIT to buy. A clever strategy is to divide that $1,000 and build an instant, diversified “forever” portfolio of professionally managed apartments, e-commerce warehouses, and essential shopping centres.
If you’re looking for foundational holdings, consider Canadian Apartment Properties REIT (TSX:CAR.UN), or CAPREIT, Granite REIT (TSX:GRT.UN), and SmartCentres REIT (TSX:SRU.UN). Together, they can create a powerful and reliable passive-income stream.
CAPREIT: The accommodation provider
As Canada’s largest residential landlord, Canadian Apartment Properties REIT, or CAPREIT, has one of the most straightforward and powerful business models on the housing market. It owns more than 40,000 apartment suites. Its core “product” is a human necessity: shelter.
With Canada going through a persistent structural housing shortage, while immigration and high homeownership costs keep demand for rentals relentless, CAPREIT’s property occupancy rates are incredibly stable, above 98%. Its residential buildings are always full, and the operating cash flow is predictable. Investors will get a fresh look at this stability when the REIT releases its third-quarter 2025 results on November 6th.
For income investors, that cash flow stability is key. The trust has paid monthly distributions since 1997. The REIT paid out 61.8% of its adjusted funds from operations (AFFO) as distributions during the first half of 2025. The distribution is well covered.
With residential leases renewing every 12 months, investors in CAPREIT enjoy long-term inflation protection. The trust has a clear path to continue growing its revenue and cash flow for decades to come.
A Canadian industrial REIT to buy: Granite REIT
Granite REIT is an industrial real estate giant that boasts massive manufacturing, logistics, and distribution properties essential for e-commerce order fulfillment. It represents how Canadians increasingly get their stuff.
Companies need these warehouses to power their online stores and fix their disrupted supply chains. Granite’s tenant list includes blue-chip companies, with giants like Amazon.com and Magna International locked into long-term leases. This makes its distributable cash flow exceptionally safe.
The industrial REIT has paid uninterrupted monthly distributions for 22 years now, and raised them consistently for 14 consecutive years. The current monthly payout yields 4.3% annually. The REIT’s distribution remains well covered with an AFFO payout rate of 64% for the first half of 2025.
Most noteworthy, Granite REIT continues to enjoy strong occupancy rates, with portfolio occupancy levels rising to 96.5% by mid-year 2025, with a fairly long weighted average remaining lease term of 5.5 years supporting high visibility into its future distributions to long-term investors.
Granite will report its third-quarter 2025 results on November 5th.
SmartCentres REIT
When searching for Canadian REITs to buy now, some investors may get nervous about the retail sector. SmartCentres REIT proves why you shouldn’t be. This retail REIT is nowhere close to a struggling fashion mall. Its portfolio is built on a rock-solid, defensive foundation: A Walmart anchor and necessity-based businesses.
About 73% of its locations are anchored by Walmart, driving resilient, all-weather traffic. People always need groceries, pharmacy supplies, and household goods. Occupancy levels remain high at 98.6%. This makes SmartCentres’ income stream one of the most durable in the REIT asset class. The REIT’s distribution remained intact while peers cut payouts during the pandemic shutdowns of 2020.
The trust has paid monthly distributions for 23 years now. The current payout yields 6.8% annually, and appears well-covered with an AFFO payout rate of 84% for the first half of 2025.
Most noteworthy, there’s a strong alignment of shareholder interests with insiders, given CEO Mitchell Goldhar’s more than 20% equity interest in the trust. Even better, units trade at a significant 25% discount to their most recent net asset value (NAV) as the REIT executes its expansive mixed-use development strategy. Long-term investors may enjoy capital gains when units reprise higher as execution eliminates doubt.
SmartCentres REIT will release its third-quarter operating results on November 12, 2025.
