When it comes to earning passive income every month, Canadian real estate investment trusts (REITs) offer a stable source of income. Canada’s real estate market is strong, and the organized structure of REITs allows you to earn rental income without the hassle of managing the property and tenants. In fact, you can have a diversified pool of REITs catering to various property mixes from residential, industrial, retail, commercial, and warehouse. A house may give you a 2.5% rental yield on the purchase price, but a residential REIT will give a higher dividend yield.
Source: Getty Images
A top dividend stock for a monthly passive income
Granite REIT (TSX:GRT.UN) is one such stock. It is among the few Canadian REITs that have increased distribution per share annually for the last 15 years despite the macro headwinds. Its business resilience comes from its diversified portfolio of 134 income-producing properties spread across North America and Europe. It has six more properties under development.
Around 70% of Granite’s properties are for distribution and e-commerce, and the remaining 30% for warehouse and special purposes. It keeps acquiring and developing new properties that meet e-commerce needs such as cold storage, multi-level fulfilment, and transport facilities. The REIT focuses on properties with lower capital expenditure and scope for expansion and redevelopment. This way, it can modernize its properties to meet changing e-commerce trends.
The REIT’s largest tenant is Magna International, which leases 20% of gross leasable area and contributes to 27% of the REIT’s annual revenue. Over the years, the REIT has reduced its dependence on Magna from 90% in 2012 and will continue to do so. Its top 10 tenants account for 46% of its annual rent. That explains its resilience to macro crisis.
On the balance sheet front, Granite has lower debt than the industry average. Its net debt is 35% of the fair market value of its properties, and earnings before interest, taxes, depreciation, and amortization (EBITDA) is 5.1 times its interest on loans as of October 31, 2025. This shows that it can comfortably pay its debt even in a lean period.
Buy 195 shares of this top dividend stock for $57/month in passive income
Granite REIT has been paying and even growing its distributions annually by expanding its income-producing properties and lowering debt. This helped reduce its dividend payout ratio from 79% of funds from operations (FFO) in 2019 to around 58% in 2025, while increasing dividends at an average annual rate of 3%. Such strong figures show that the REIT can fund most of its developments and also grow dividends in lean periods when occupancy falls.
For 2026, Granite has increased the dividend per share by 4% to $3.55. So, if you buy 195 units of Granite REIT now, you can get a total passive income of $692.25 in the next 12 months or $57 per month. The REIT is currently trading above $76 and can give a yield of 4.7%, which is better than what you would get if you rent a house.
Investor takeaway
The best part about the REIT is that the payout begins immediately from next month onwards and does not trap hundreds and thousands of dollars. So, for $57 per month, you will be paying around $15,000 to buy 195 shares. If the REIT grows its distribution by 4%, your passive income will adjust to inflation.
When you don’t need the money, you can use the dividends to buy more units of Granite and compound your passive income.
