Passive income is money earned with minimal ongoing effort, typically requiring an upfront investment of time, capital, or other assets. In today’s uncertain economic environment, building passive income has become increasingly important, as it can provide financial stability while helping offset inflation’s impact. Moreover, reinvesting these regular payouts can accelerate wealth creation through compounding.
Among the various passive-income options, monthly dividend-paying real estate investment trusts (REITs) stand out for their ability to generate reliable cash flow. Since REITs are required to distribute a significant portion of their taxable income to unitholders, they often offer attractive dividend yields. With that in mind, here are two high-quality REITs that could generate approximately $187 in monthly dividend income from a combined investment of $35,000.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | INVESTMENT | DIVIDEND | TOTAL PAYOUT | FREQUENCY |
| APR.UN | $30.32 | 577 | $17,494.64 | $0.15417 | $88.95 | Monthly |
| SRU.UN | $12.17 | 1,437 | $17,488.29 | $0.0685 | $98.44 | Monthly |
| Total | $187.39 | Monthly |
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Automotive Properties Real Estate Investment Trust
One of the top monthly-paying dividend stocks that is ideal for income-seeking investors is Automotive Properties Real Estate Investment Trust (TSX: APR.UN). The REIT owns and acquires automotive dealership, service centre, and original equipment manufacturer (OEM) properties across Canada and the United States. It currently operates 95 income-producing commercial properties, with a gross leasable area of 3.5 million square feet.
Supported by its strategically located properties and high-quality tenant base, Automotive Properties REIT maintains 100% occupancy and consistently strong rent collection, providing resilient cash flows even during periods of economic uncertainty. Furthermore, most of its leases include contractual rent escalators, some of which are indexed to the consumer price index (CPI), enabling the REIT to offset inflation while driving stable revenue growth. This reliable financial performance and these cash flows have allowed the REIT to maintain its payouts for more than a decade and currently offer a forward yield of 6.8%.
The automotive dealership market in Canada and the United States remains highly fragmented, providing ample opportunities for consolidation through acquisitions. Supported by $32.5 million in liquidity and 13 unencumbered properties valued at $195.4 million, Automotive Properties REIT has ample financial flexibility to pursue future acquisitions and drive long-term growth. Given its expansion strategy, healthy occupancy rate, and favourable industry fundamentals, the REIT appears well-positioned to continue rewarding shareholders with healthy dividends, making it an attractive buy for income-seeking investors.
SmartCentres Real Estate Investment Trust
Another high-yield REIT I’m bullish on is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which owns and operates 200 strategically located properties across Canada. The REIT benefits from a high-quality tenant base, with 95% of its tenants having a regional or national presence and more than 80% providing essential services. As a result, it maintains a consistently high occupancy rate and generates resilient rental income across economic cycles.
Supported by steady leasing activity and rising rental rates, SmartCentres continues to generate reliable cash flows, enabling it to pay attractive monthly distributions to investors. Its current monthly distribution of $0.15 per unit translates into a forward yield of approximately 6.1%.
Meanwhile, SmartCentres continues to expand its portfolio to capitalize on strong demand for Canadian retail space. It is currently developing a 200,000-square-foot retail property that has been fully pre-leased to Canadian Tire and expects to hand over possession by the end of this quarter. The REIT is also developing self-storage facilities in Quebec and British Columbia, with these projects expected to begin contributing to earnings soon. Overall, it has approximately 0.8 million square feet of properties under construction.
Looking further ahead, SmartCentres has a development pipeline of approximately 87 million square feet across various stages of planning and development. Combined with its high occupancy rate, resilient cash flows, and substantial growth pipeline, the REIT is well-positioned to continue delivering attractive monthly distributions, making it an excellent choice for income-focused investors.
