The Tax-Free Savings Account (TFSA) is far more than its name might suggest. For the savvy investor, the TFSA is more of a tax-free investment account due to its tax-sheltered status and the ability to be an investment vehicle that lets you keep more of the returns on your investments.
Generating long-term savings for greater financial freedom down the line is an excellent use for a TFSA. For income-focused investors, using the account to hold monthly dividend stocks can be an excellent use of the account. Having a stream of reliable passive income can be just as crucial to building sustainable wealth over time.
This is why high-yield investments providing regular monthly returns should be a priority for TFSA investors. That said, high-yielding returns must not be the only focus. The quality of the underlying business and its ability to sustain the payouts is critical to securing a reliable passive income stream.
Today, I will discuss a Real Estate Investment Trust (REIT) that is anchored in a defensive industry, making it a good candidate to consider for your portfolio against this backdrop.
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Slate Grocery REIT
Slate Grocery REIT (TSX: SGR.UN) is a $1 billion market-cap trust that owns and operates an extensive portfolio of real estate properties tied to the US grocery sector. The trust has critical real estate infrastructure across the biggest metro markets in the US that people in the region rely on for their daily necessities.
As of this writing, Slate Grocery REIT trades for $17.26 per unit, and it pays its investors US$0.098 per unit each month, translating to an annualized 6.9% dividend yield. Such a high-yielding monthly return might not seem sustainable or healthy, but the underlying business has what it takes to support these monthly distributions.
The monthly dividend stock has its portfolio tied to critical community hubs. Its focus on essential goods and services-based retail helps it generate stable and recurring rental income and high occupancy rates.
The trust’s latest quarter ended in March 2026, with Slate seeing an 11.8% year-over-year (YoY) increase in its rental revenue. Higher rates and robust leasing activity allowed the trust to generate this growth. During this period, Slate signed new leases that were almost 50% above the comparable average rents, showing how its pricing power offers the trust a solid avenue to secure more revenue growth.
Slate also reported 2.1% growth in its same-property net operating income (NOI) on a trailing 12-month basis, and its occupancy stayed solid at 94.4%. These results show a clear and strong demand for the trust’s grocery-anchored properties.
Foolish takeaway
Slate Grocery REIT is a monthly dividend stock offering distributions that yield the kind of returns that can beat inflation rates. The trust has strong leasing momentum that indicates long-term growth potential, which can make it a good investment to buy and hold in a TFSA for the long run.
While I would strongly advise using your available TFSA room to hold investments diversified across several industries, Slate Grocery REIT warrants being considered as part of your self-directed portfolio.
