Investors in retirement want the best combination of reliable, predictable income and steady long-term growth. The TFSA (Tax-Free Savings Account) is a great place to invest for income because your income is completely tax-free.
Simply investing through your TFSA saves you the hassle of reporting investment income and the nasty hassle of paying income tax on your investments. Keeping that extra income can go a long way, especially for a retiree.
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A great real estate stock for retirement
If you are looking for a stock with an elevated yield that you can buy and hold for retirement, Dream Industrial Real Estate Investment Trust (TSX: DIR.UN) looks to be a good bet.
This is a wonderful way to buy real estate, but without any of the costs, management, or hassle of actually owning the assets. If you have ever owned an investment property, you will know they are far from passive investments. They require a massive amount of work.
Dream saves you from all of that. With this stock, you get a qualified management team, a strong investment platform, and a mix of high-quality assets that would be difficult for an individual investor to buy on their own.
A quality stock if you don’t want to be a landlord yourself
Dream manages and owns $17 billion of industrial real estate in Canada, the United States, and Europe. These are attractive assets because they are multi-tenanted and purpose flexible.
The properties cater to a wide array of tenants and industries. In fact, it has over 1,500 different tenants in its portfolio. Its top 10 tenants only occupy 11% of its total portfolio, so it is not overly reliant on any one specific tenant or industry.
Currently, Dream is sitting at 95% occupancy. While any vacancy isn’t a good thing, there could be upside for Dream. Recent new leases and renewals across its portfolio have enjoyed an average 15% rental rate increase. As that vacancy turns into occupancy, it should enjoy a nice rental uplift.
Dream has plenty of opportunities to keep growing its income. It has development opportunities, solar power investments, a rising asset management fee stream, and acquisitions.
The REIT is aiming for 8% net operating income growth in 2026. Year-to-date, funds from operations (FFO) per unit (a key profitability metric for REITs) have risen by 6%, but the back half of 2026 could be even better.
A cheap stock and a steady income stream for retirement
For a REIT, Dream has a solid balance sheet. It has a BBB credit rating and a modest 35% net debt-to-asset ratio. Eighty-three percent of its property value is unencumbered by debt, so that provides considerable flexibility.
Dream pays a $0.06 per unit distribution every month. It just increased that distribution for the first time in several years. Dream’s payout ratio is sitting at 63% of FFO, meaning it can fund its distribution and still have excess capital for growth investments.
Today, Dream offers a 5.7% distribution yield. This stock trades at a 32% discount to its private market value. The stock is incredibly cheap. Inside the TFSA, you can collect a very attractive tax-free passive income stream while you wait for that value to be unlocked. If you are in retirement and you like real estate, this is a great stock to hold for the years ahead.
