1 Ideal TFSA Stock Paying 7% Income Every Month

You can build a Tax-Free Savings Account (TFSA) that feels like payday, but you need the right kind of stock. The ideal monthly income pick generates dependable cash, shares it on a set schedule, and avoids nasty surprises. That means steady demand, a simple model, and distribution management can support after interest, maintenance, and reinvestment. A high yield looks fun, but the TFSA win comes from consistency, so you want quality first and yield second. Monthly payers also help you reinvest quickly, so your dividends can buy more units sooner. Now, let’s consider one winner.

SRU

SmartCentres REIT (TSX:SRU.UN) checks many of those boxes as it owns and operates Canadian real estate that people use for everyday errands. It focuses on value-oriented shopping centres and other well-located sites across the country, and it controls a lot of land around them. That land matters because it lets the real estate investment trust (REIT) add new income streams over time instead of relying on rent increases alone.

This REIT also looks more modern than its big-box reputation suggests. Retail rent still drives the core, but SmartCentres has leaned into mixed-use growth where it makes sense. It adds density through residential projects in select locations and pushes into self-storage as a needs-based business. That mix can help it balance cycles, as shoppers, renters, and storage customers rarely all pull back at once.

Recent performance has leaned steady rather than spectacular, which suits a monthly-income play. The units moved as interest rates tugged the whole REIT sector up and down. Over the past year, SRU.UN traded between about $23.18 and $27.21, and it recently sat around $26. You buy it for the cheque, not the fireworks, and you hope for a nicer backdrop later.

Numbers don’t lie

When you dig into the latest quarter, the operating picture looks healthy. In its third-quarter 2025 update, SmartCentres reported in-place and committed occupancy of 98.6%. The dividend stock also pointed to leasing momentum, renewal rent growth, and same-property net operating income growth. A REIT lives or dies on leased space and rent cheques, not on one-off accounting swings.

Earnings headlines can confuse REIT investors, so focus on cash-flow measures. SmartCentres reported funds from operations (FFO) with adjustments per unit of $0.56 for the quarter versus $0.53 a year earlier. Even as basic FFO per unit moved around due to mark-to-market items. It also reported a payout ratio to adjusted FFO of 95.1% for the quarter. That sits high, so you want continued leasing strength and sensible refinancing if rates stay sticky. SmartCentres also raised new-term debentures after quarter-end and plans to repay a $350 million maturity and trim floating-rate debt. This can lower volatility in interest costs.

Valuation stays tricky, as REIT prices react to interest-rate headlines. At recent levels, SmartCentres offered a trailing annual distribution rate of $1.85 per unit, which works out to a yield around 7% today. Meanwhile, the outlook looks practical, not flashy. SmartCentres keeps advancing its development pipeline, including self-storage openings that management expects in 2026, and it continues work on major projects that can add higher-value income over time. It also declared its December 2025 distribution at $0.15417 per unit, and it keeps paying monthly, which makes TFSA income planning simple.

Bottom line

Altogether, SRU.UN can earn a spot as an ideal TFSA monthly payer. It turns rent into cash every month, it runs with very high occupancy, and it has a land bank and pipeline that can support longer-term growth. Right now, here’s what even $7,000 can bring in through dividends alone.

The risks still matter: higher borrowing costs can squeeze coverage, a downturn can slow leasing, and a high payout ratio leaves less margin for error. Still, if you want tax-free income that shows up regularly, this REIT offers a straightforward way to make your TFSA feel useful right now.