How to Structure a $50,000 TFSA for Practically Constant Income

A tax-free savings account (TFSA) is an ideal tool for making your money work more efficiently. Investors can earn tax-free returns on investments made through their TFSAs up to a specified contribution limit, making it particularly attractive for long-term wealth building.

In today’s relatively low-interest-rate environment, high-quality, monthly-paying dividend stocks can be especially appealing to investors seeking steady income. Among these options, real estate investment trusts (REITs) stand out, as they must distribute at least 90% of their taxable income to shareholders, thereby generating consistent, reliable income streams. As a result, they are particularly well-suited for income-focused investors.

For instance, investing $50,000 across the following two REITs could generate more than $270 in monthly income. Let’s take a closer look at these two REITs and what makes them compelling investment opportunities.

SmartCentres Real Estate Investment Trust

First on my list is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which owns and operates 198 strategically located properties across Canada. The REIT also benefits from a strong tenant base, with about 95% of its tenants having a national or regional presence and more than 60% providing essential services. Supported by its well-located properties and resilient tenant mix, the company usually enjoys a healthy occupancy rate, which stood at 98.6% at the end of the fourth quarter.

Additionally, the REIT has an extensive development pipeline totalling 87.4 million square feet of mixed-use properties, including retail, senior housing, self-storage, and office projects. Of this total, approximately 0.8 million square feet is currently under construction.

Given its defensive, retail-focused portfolio, these expansion projects could support future earnings growth and help sustain its dividend payments. Currently, the REIT pays a monthly distribution of $0.15417 per unit, which translates to a forward yield of about 6.8%.

Northwest Healthcare Properties REIT

Another REIT that I believe is well-suited for income-seeking investors is NorthWest Healthcare Properties REIT (TSX: NWH.UN), which owns and operates 133 healthcare infrastructure properties across six countries. The REIT benefits from long-term lease agreements with tenants that are often backed by government funding, providing greater revenue stability. Additionally, its weighted-average lease expiry is 12.3 years, offering strong visibility into its future cash flows.

Last year, the REIT completed 1.1 million square feet of new, renewed, and extended leases with a strong renewal rate of 88%. Meanwhile, the same-property net operating income increased by 3.1%, and the occupancy rate remained healthy at 96.4% at the end of the year. Additionally, its adjusted funds from operations (AFFO) rose 10.4% to $105.6 million, improving its AFFO payout ratio to 86% from 92% in 2024. Notably, the company’s AFFO payout ratio in the fourth quarter was even stronger at 75%, reflecting improved earnings coverage for its distributions.

The company has also strengthened its balance sheet by selling $560 million worth of non-core assets and using the proceeds to reduce debt. As a result, its debt-to-gross book value improved from 50% at the end of 2024 to 46.4%. Furthermore, its liquidity stood at $465.5 million at the end of 2025, highlighting its solid financial position.

With improving fundamentals and a stronger balance sheet, management remains focused on driving organic growth and pursuing selective acquisitions to support sustainable distributions. Currently, the healthcare REIT pays a monthly distribution of $0.03 per unit, yielding 6.3%.