A fully loaded Tax-Free Savings Account (TFSA) is too valuable to turn into a dividend science experiment. If a stock inside collapses, the lost value doesn’t magically return as contribution room. An 8% yield can therefore become a tax-free paycheque or a remarkably efficient way to make $109,000 smaller.
Source: Getty Images
Paying it all out
The difference is coverage. A real estate investment trust (REIT) collects rent, pays its property expenses, and distributes much of the remaining cash. Investors should compare that payment with adjusted funds from operations (AFFO), which estimates the recurring cash available after maintaining the buildings. A payout ratio below 100% means the REIT isn’t distributing more than it produces.
Payment frequency matters, too. A monthly distribution can cover bills or buy additional units every four weeks, allowing compound growth to begin working sooner. Neither the schedule nor the yield makes the payment guaranteed, so the business beneath it still gets the final vote.
The TFSA adds another layer of urgency. The 2026 limit is $7,000, while someone eligible every year since 2009 could have $109,000 of cumulative room. Unused room carries forward, and withdrawals generally return as room the next calendar year. Growth and withdrawals are tax-free, yet investment losses create no new room. In short, investors should check their own records before contributing to a TFSA.
Consider NXR
Nexus Industrial REIT (TSX: NXR.UN) owns 88 Canadian properties spanning roughly 12.3 million square feet. Its warehouses, distribution centres, and manufacturing buildings support the unglamorous work behind e-commerce, supply chains, and production. Boxes still need somewhere to live before arriving on the porch.
The dividend stock has also reached a turning point. Nexus spent several years selling legacy offices and stores to become a nearly pure-play industrial landlord. It then earned an investment-grade credit rating and completed a $500 million bond offering in April, giving the dividend stock more flexible funding for refinancing and growth.
First-quarter leasing spreads averaged 32% above expiring and existing rents, showing that older leases contain useful growth. More importantly, the normalized AFFO payout ratio improved to 96.6% and slipped below 100% for the first time in 10 quarters. Coverage remains snug, but the dividend stock has finally stopped standing outside with its face pressed against the window.
What a maxed-out TFSA could pay
Another earnings improvement could persuade investors that new developments and higher rents can protect the distribution, while a reversal would expose how little cushion remains. Waiting for perfect certainty may mean paying more.
At writing, the dividend stock trades at $7.97, Nexus’s $0.64 annualized distribution produces an 8.03% yield. Investing $109,000 would buy 13,676 whole units and leave $2.28 uninvested.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| NXR.UN | $7.97 | 13,676 | $0.64 | $8,752.64 | Monthly | $108,997.72 |
That works out to an actual $729.39 monthly payment. Reinvesting just the first deposit at the same price could buy another 91 units, allowing each later payment to build a gradually larger TFSA paycheque.
There are risks to consider. A 96.6% payout ratio leaves little room for vacancies, refinancing pressure, or slower leasing. Industrial occupancy also slipped to 95% in the first quarter. I would only put an entire TFSA here if my Registered Retirement Savings Plan (RRSP) and other accounts already provided broad diversification, because one landlord shouldn’t hold the spare key to retirement.
Bottom line
For an experienced income investor, Nexus offers something the market may not leave available forever: an 8% monthly yield just as rent resets, completed developments, and cheaper access to debt could strengthen coverage. If results confirm that direction, today’s tax-free paycheque could arrive with a long-overdue recovery in the unit price.
