The Tax‑Free Savings Account (TFSA) is one of the best tools for Canadian investors to use to build a dependable monthly income stream. Because growth and withdrawals are completely tax‑free, that means every dollar generated from your investments goes into your pocket.
When combining the TFSA with the right monthly‑paying REITs, the account can become a powerful, reliable income machine that delivers cash every single month.
Here’s a look at some of the best REITs to consider buying for a source of monthly income.
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Option #1: RioCan Real Estate
RioCan Real Estate (TSX:REI.UN) is one of the largest REITs in Canada. The company has historically focused on commercial retail properties, but in recent years has shifted to include more mixed-use residential properties.
Those properties are located in high-traffic areas of Canada’s metro markets, catering to the strong demand for both retail and residential tenants.
More importantly, that strong demand and diversified tenant base makes RioCan one of the better-paying options on the market. In fact, RioCan’s uniquely diversified portfolio makes it an ideal alternative to owning real estate. As of the time of writing, the REIT offers a monthly distribution that carries a yield of 5.7%.
For TFSA holders, RioCan provides the perfect mix of retail and residential properties that add a layer of defensiveness. This helps to maintain predictable cash flow through different market cycles.
Option #2: Slate Grocery REIT
The second option to help generate monthly income is Slate Grocery REIT (TSX:SGR.UN). Slate is a grocery-anchored REIT. This provides an unusually defensive appeal to any portfolio, given the sheer necessity of food.
Slate also offers another unique distinction for investors to note, and that’s geography. Slate’s portfolio of over 100 grocery-anchored properties is U.S.-based.
In other words, Slate’s portfolio is comprised of stable, high-occupancy sites that provide essential products regardless of economic conditions.
That stable revenue base helps Slate to provide an appetizing monthly distribution. As of the time of writing, that yield works out to 7.4%, making it one of the better-paying options on the market.
For TFSA investors seeking monthly income, Slate offers a perfect balance between high-income potential and defensive appeal.
Option #3: SmartCentres REIT
The third option for monthly income seekers to consider is SmartCentres REIT (SRU.UN). SmartCentres is a retail-focused REIT that is focused on necessity-based retail.
A key factor in SmartCentres’ portfolio is that many of its properties are anchored by major national retailers. This translates into a stable revenue base that provides ample foot traffic to its properties. The recurring traffic to the larger anchor tenants also supports the smaller, secondary tenants on those properties.
In short, the unique tenant mix helps support stable occupancy and maintains SmartCentres’ predictable distributions. As of the time of writing, SmartCentres offers a yield of 6.6%.
For TFSA investors seeking steady monthly income, SmartCentres provides a unique middle ground. It can offer a higher yield than large blue‑chip REITs, but with a strong foundation of essential tenants. The REIT also has a long‑term development pipeline to add to future growth potential.
How to combine these REITs into a monthly income machine
The three REITs mentioned above can provide investors with a healthy source of monthly income. Here’s how an allocation of just $7,500 into each REIT can provide a monthly income stream.
Note that prospective investors who aren’t ready to draw on that income yet can choose to reinvest those distributions, allowing them to continue to grow until needed.
| Company | Recent Price | No. of Shares | Dividend | Total Payout | Frequency |
| RioCan Real Estate | $21.38 | 350 | $1.16 | $406 | Monthly |
| Slate Grocery REIT | $16.26 | 461 | $1.20 | $553.20 | Monthly |
| SmartCentres REIT | $28.55 | 262 | $1.85 | $484.70 | Monthly |
| Annual Payout: | $1,443.90 | Monthly: | $120.33 |
By combining these REITs inside a TFSA, investors can build a monthly income stream that grows tax‑free and supports long‑term financial goals.
