A 5.7% Monthly Payer: How $10,000 Could Generate About $47 a Month

Buying a rental property could be one of the first ideas that come to mind when you think about earning passive income. And I can understand why. Having tenants send you rent every month sounds pretty appealing, especially if you’re hoping to build an income stream alongside your regular job.

But then I start thinking about the down payment, mortgage payments, unexpected repairs, and those calls from tenants when something stops working. Suddenly, the idea doesn’t seem quite so passive.

That’s why I’d personally rather explore a way to earn income from real estate without taking on all those responsibilities myself. That’s where real estate investment trusts (REITs) come into the picture. You can invest in a portfolio of income-producing properties through the stock market, and most TSX-listed trusts distribute cash every month. You won’t own an apartment or shopping centre outright, but you could still benefit from the rental income those properties generate. And you don’t necessarily need an enormous investment to get started.

In this article, I’ll share one Canadian REIT that could pay roughly $47 a month on a $10,000 investment, without requiring you to become a landlord.

A top monthly dividend stock to generate passive income

One Canadian monthly payer worth a closer look right now is Crombie Real Estate Investment Trust (TSX: CRR.UN), especially if you like the idea of collecting income from properties without owning one yourself.

Headquartered in New Glasgow, Crombie owns and operates real estate across Canada. Grocery-anchored retail properties account for an important part of its portfolio, along with retail-related industrial sites and mixed-use residential developments. In total, it has 303 properties covering about 18.8 million square feet, including its share of joint ventures.

At the time of writing, Crombie units closed at $15.88 each, giving the REIT a market cap of roughly $1.8 billion. At that price, its annualized distribution yield was 5.7%, with cash payments made monthly.

Why this monthly payer looks attractive

Of course, an attractive monthly yield means more when the business behind it continues to perform well. In the second quarter, Crombie’s property revenue rose 2% year-over-year (YoY) to $126.2 million, backed by recent acquisitions, new leasing, and renewals. More importantly, its commercial same-asset property cash net operating income climbed 3.2% YoY to $85.1 million, helped by higher rental rates and new leasing activity.

Another positive was Crombie’s committed occupancy rate, which improved to 97.5% from 97.2% a year ago. The REIT also renewed 121,000 square feet of retail space during the quarter at rental rates 11.3% higher than the expiring rates, reflecting healthy demand for its properties.

Besides these encouraging financial trends, Crombie continues to invest in long-term growth. During the quarter, it substantially completed its 291-unit Marlstone residential rental project in Halifax, welcomed its first residents, and invested $10.6 million in property modernizations. It also acquired a retail property in Surrey for $12.7 million.

With strong occupancy, growing commercial property income, and continued investments in expanding its portfolio, Crombie could be an attractive monthly income stock to hold for years to come.

How could $10,000 pay about $47 a month?

The income calculation is straightforward. At an annualized yield of 5.7%, a $10,000 investment would generate about $570 a year in distributions. Spread over 12 months, that’s about $47 a month.

You could use those payments for everyday expenses or reinvest them to buy more units. Over time, reinvesting could help increase your holdings, although unit prices and future distributions can change.

Is this monthly dividend stock a buy now?

You should remember that Crombie isn’t an income guarantee. Still, its grocery-focused portfolio, exposure to other property types, and monthly distributions make it an appealing TSX stock for investors seeking recurring passive income and potential long-term growth.