If you want your Tax-Free Savings Account (TFSA) to be much more than just a place to hold extra cash, you may want to focus on the right investments that can become a reliable source of growing passive income over time. That’s one of the key reasons why many Canadian investors use their TFSA to buy dividend-paying stocks capable of generating steady monthly cash flow.
To achieve that goal, real estate investment trusts (REITs) are especially popular because nearly all of them distribute income every month. One Canadian REIT that continues to stand out in that category is BSR Real Estate Investment Trust (TSX:HOM.UN). In this article, I’ll explain how this REIT could help investors work toward generating $500 in monthly tax-free income from a TFSA.
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BSR Real Estate Investment Trust stock
To put it simply, BSR Real Estate Investment Trust is an internally managed REIT focused on owning and operating multifamily residential properties across the United States. Its portfolio mainly consists of garden-style apartment communities located in high-growth Sunbelt markets, where population growth and housing demand remain strong.
The REIT owns more than 25 residential properties, including communities such as Adley at Gleannloch Apartments and Aura 35Fifty. These assets are located in regions that continue to benefit from favourable migration trends and economic expansion.
After climbing nearly 5% over the last two months, BSR stock currently trades at $15.74 per share, giving the REIT a market cap of roughly $856 million. At this market price, the stock is continuing to offer an attractive dividend yield of 4.8%, with monthly payouts.
Why does it look attractive for income-focused investors?
One of the biggest reasons income-focused investors may find BSR appealing is its monthly distribution structure. Monthly payouts can create a more predictable stream of passive income while also allowing investors to reinvest distributions more frequently inside a TFSA.
The REIT’s recent financial performance has remained relatively stable despite broader real estate market pressures. In the first quarter of 2026, BSR generated total portfolio revenue of US$33.8 million. While that figure reflected a decline from the previous year due partly to property dispositions and softer occupancy, the REIT still showed operational improvement in several areas.
Its net operating income (NOI) rose 9.9% sequentially to US$17.6 million, helped by lower maintenance costs, reduced administrative expenses, and higher real estate tax refunds. Its newly acquired assets also continued to stabilize during the quarter.
Long-term growth opportunities remain encouraging
BSR continues focusing on strengthening its portfolio and improving operational efficiency. Occupancy at The Ownsby, a property it acquired in August 2025, increased to 73.1%, reflecting improving performance at recently acquired assets.
Another encouraging factor is BSR’s disciplined financial management, as the company has proactively managed its debt through blended interest rate swaps designed to secure more favourable borrowing terms. That approach could help improve financial flexibility during changing interest rate environments.
More importantly, Sunbelt residential markets continue benefiting from long-term demographic trends, including population growth and strong rental demand. Those factors could support improvements in BSR’s occupancy levels and rental income growth in the years ahead.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| BSR Real Estate Investment Trust | $15.74 | 7,693 | $0.065 | $500.05 | Monthly |
| Prices as of May 26, 2026 |
How to generate a $500 tax-free monthly income from a TFSA
So, how much would investors need to generate $500 in monthly TFSA income from BSR? Based on its current 4.8% distribution yield and a monthly distribution of US$0.047 (or about $0.065), generating roughly $500 monthly in tax-free income would require an investment of about $121,088 to buy 7,693 of its shares.
While that should give a good idea of how you could generate tax-free monthly passive income inside a TFSA, I wouldn’t recommend putting such a large amount into a single stock. Instead, a better approach would be to diversify your TFSA portfolio across multiple high-quality dividend-paying stocks and REITs to reduce risk while still building a reliable stream of monthly passive income over time.
