The hunt for yield is on for passive income investors looking for ways to score decent monthly payouts without having to pay up too much or run the risk of an imminent dividend (or distribution in the case of ETFs or REITs) cut. As you’re probably aware, the great TSX Index bull market, while great for holders, is making it just a bit more challenging to find those mega-yielders that were once abundant in the Canadian stock market, especially relative to the growthier U.S. market. Of course, the TSX Index is still home to some very generous yielders, many of which have well-covered payouts and a path to growth over the long term.
In any case, though, the average yield across the board is down as a result of appreciation, but for investors willing to look to the names that haven’t been nearly as hot in recent years, I do think there’s an opportunity to get more yield for a very low price of admission. Indeed, the REIT space is still a great place to look for yield, even if you’re a tad worried that the Bank of Canada is going to start increasing rates after its lengthy pause. Indeed, after the latest meeting, it felt like a rate hike or two is not off the table.
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Rate uncertainty could complicate the hunt for quality yield
Arguably, a cautious rate increase would have been a wise move to combat the lingering inflation we’ve witnessed this year. With uncertainties in Iran picking up once again, questions linger as to whether we’re out of the woods yet when it comes to higher oil prices. I have no idea, but things can change at the drop of a hat. As such, it’s critical that investors are prepared for whatever comes up next. And, yes, that includes a sudden spike that sees oil rise above the US$100 mark.
With so many energy names on the Canadian market, there’s a natural hedge of sorts, but, for the most part, I think the REITs are places to look if you want a 6–8% yield, rather than a 4% yield that’s possible with the energy producers.
Automotive Properties REIT
For those who need to have more yield and are already overinvested in energy (many TSX Index-heavy investors may be), consider shares of Automotove Properties REIT (TSX:APR.UN), a fantastic 6.9% yielder (to clarify, that’s the annual yield, not the monthly yield) that’s shone quite bright in 2026, with a gain of more than 10% year to date in the books.
Indeed, it’s been a volatile past five years since the COVID crisis, but the auto dealership-focused real estate play is finally starting to find its stride, and I think the name might not only be a generous monthly income play, but a deep-value option as well. The REITs are in sound financial shape, and with a solid and very lengthy (much lengthier than I expected) leasing structure, investors can sleep well at night with the name as they collect some very generous cheques monthly.
In my opinion, APR.UN is a standout income option that’s worth buying today and on any dips in the future tied to interest rate moves.
