Canadians who want steady cash flow in a Tax-Free Savings Account (TFSA) should look for dividend stocks that pay monthly instead of quarterly.
GO Residential Real Estate Investment Trust (TSX:GO.U) is one such Canadian dividend stock with a monthly payout.
GO Residential owns luxury apartment towers in New York City, pays unitholders monthly, and recently announced a deal that would roughly quadruple its size. Here is what income-focused TFSA investors need to know before the next distribution lands.
Source: Getty Images
What the monthly dividend stock owns
GO Residential went public about a year ago as a newly created, internally managed REIT. The trust launched with five luxury high-rise properties in Manhattan holding 2,015 suites.
Since then, management has been adding buildings one at a time. In the second quarter, the REIT closed on 7 Dey Street for US$225 million and Ivy Tower for US$151.9 million, then soon after picked up a stake in 409 Eastern Parkway.
That brought the portfolio from five buildings to eight.
The timing has worked in the REIT’s favoUr. Manhattan vacancy sat below 2% through the quarter, median rents hit record highs in both Manhattan and Brooklyn, and listings dropped to a four-year low. Average monthly rent across GO’s same-property portfolio climbed to US$6,981 per suite, and jumped further to US$7,055 in July.
GO Residential pays US$0.053 per unit each month, or US$0.64 annualized. Management targets a payout of roughly 65% of AFFO (adjusted funds flow from operations) on an annualized basis, and the trust has stayed close to that mark. The payout ratio stood at 68.5% in Q2 and 65.7% in the first six months of 2026.
Second quarter funds from operations came in ahead of forecast for the fourth straight quarter. AFFO was US$14.7 million, with a net operating income margin of 73.4%, up from 72.5% in the year-ago period. It ended Q2 with a committed occupancy rate of 99.6%.
On the balance sheet, debt-to-gross-book-value was 53.5%, and 96% of total debt carries a fixed rate at a weighted average of 4.5%. Fixed-rate debt keeps interest costs predictable, which should help sustain monthly dividends.
A deal that changes the story
On August 11, GO Residential announced it would acquire H&R REIT’s U.S. residential portfolio, known as Lantower, in a deal worth about US$7.8 billion in enterprise value. H&R unitholders will receive US$4.28 in cash plus 0.57 GO units for each H&R unit they own.
The combined company would grow to 37 properties and roughly 13,300 suites across eight markets in four states, becoming Canada’s second-largest publicly traded residential REIT.
New York would remain about 70% of net operating income, with the new Sunbelt properties in markets like Dallas, Miami, and Austin making up the rest.
Chief Executive Officer Joshua Gotlib explained why the deal fits the trust’s original plan rather than changing it.
“This transaction represents the acceleration of work,” Gotlib said on the earnings call. “Our core business remains intact. We have got eight trophy assets in the best residential market in North America. We are not diversifying away from it. We are adding to it.”
Management expects the deal to add US$15 million in annual synergies within 12 to 18 months, cut debt-to-EBITDA (earnings before interest, tax, depreciation, and amortization) by more than two turns, and be modestly accretive to funds from operations per unit.
Why monthly payers like this suit a TFSA
Distributions and dividends earned inside a TFSA are not taxed, no matter how often they land in your account. This makes monthly payers appealing, since you can reinvest the cash sooner and compound more often than a quarterly payer allows.
Holding a stock like GO Residential inside a TFSA gives investors monthly cash flow from two different sectors, along with the potential for capital gains if the underlying business grows, all without owing a cent of tax on either.
