This Practically Perfect 4% REIT Pays Monthly

Are you looking for liquid investments that pay cash income each and every month?

If you are, then real estate investment trusts (REITs) might be just what the Doctor ordered.

REITs usually have high yields, passing 90% or more of their earnings on to shareholders. They also usually pay out their dividends on a monthly schedule, which distinguishes them from the vast majority of common stocks.

Stocks typically pay dividends quarterly, to align with the three month earnings reporting cycle. REITs, with their relatively stable and predictable cash flows, can afford to pay dividends more frequently. This makes REITs natural choices for those who are using securities to pay for their living expenses, such as retirees. In this article, I will share one nearly-perfect REIT with a 4% yield that pays monthly.

Killam Apartment REIT

Killam Apartment REIT (TSX:KMP.UN) is a Canadian REIT that invests in residential property. It owns property across seven different provinces, including Ontario, Alberta, British Colombia and Nova Scotia. The REIT’s properties fall into three different categories:

1. Apartment buildings.
2. Manufactured home communities. Basically, trailer park communities.
3. Commercial properties. Commercial real estate leased out near Killam’s residential properties, to support its residents.

The geographic and property categories above give Killam an admirable amount of diversification in its portfolio, while still keeping it squarely in the residential REIT category. This is important because residential REITs have some advantages that other types of REITs don’t, as we’ll see in the next category.

The virtue of residential REITs

There are many different types of REITs: residential, industrial, hotel, malls. Many of these types of REITs are subject to unpredictable trends in property desirability. A classic example here is mall REITs, whose property type has lost popularity in North America.

Residential REITs don’t have this problem. Housing will always be in demand. Apart from rare incidents, such as depopulation events, residential REIT holders don’t need to worry about their properties becoming irrelevant. This makes such REITs more dependable than much of the competition.

Respectable growth and profitability

Over the years, Killam Apartment REIT has demonstrated respectable growth and profitability.

Over the last five years, KMP.UN has compounded its revenue, operating income (EBIT), and book value at the following rates:

• Revenue: 7.8%.
• EBIT: 9.5%.
• Equity: 11.7%.

For a REIT trading at 14.4 times funds from operations (FFO), these are adequate rates of growth. Also, the company is involved in M&A activity aimed at continuing the growth into the future.

Now, let’s take a look at profitability.

In the trailing 12-month period, KMP.UN boasted the following profitability metrics:

• A 61% EBIT margin.
• A 40% FFO margin.
• A 61.5% EBITDA margin.

These metrics indicate that KMP.UN is fairly profitable.

Dividend potential

Killam Apartment REIT has about a 4% dividend yield. It pays a $0.06 monthly dividend, which works out to $0.72 per year. The current unit price is $17.94. So, if you invest $50,000 in the REIT, you’ll get $2,000 per year back in passive income, assuming no dividend cuts or raises. Here’s the math on that:

COMPANYRECENT PRICENUMBER OF SHARESDIVIDENDTOTAL PAYOUTFREQUENCYKillam Apartment REIT$17.942,787$0.06 per month ($0.72 per year)$167 per month ($2,006 per year)Monthly

Bottom line

The bottom line on Killam Apartment REIT is that it’s a well run, professionally managed REIT with a lot of income potential. Those buying it today will probably do well.

The post This Practically Perfect 4% REIT Pays Monthly appeared first on The Motley Fool Canada.

Should you invest $1,000 in Killam Apartment REIT right now?

Before you buy stock in Killam Apartment REIT, consider this:

The Motley Fool Canada team has identified what they believe are the top 10 TSX stocks for 2026… and Killam Apartment REIT wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 … if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have over $18,000!*

Now, it’s worth noting Stock Advisor Canada’s total average return is 94%* – a market-crushing outperformance compared to 85%* for the S&P/TSX Composite Index. Don’t miss out on our top 10 stocks, available when you join our mailing list!

Get the 10 stocks instantly #start_btn6 { background: #0e6d04 none repeat scroll 0 0; color: #fff; font-size: 1.2em; font-family: 'Montserrat', sans-serif; font-weight: 600; height: auto; line-height: 1.2em; margin: 30px 0; max-width: 350px; text-align: center; width: auto; box-shadow: 0 1px 0 rgba(0, 0, 0, 0.5), 0 1px 0 #fff inset, 0 0 2px rgba(0, 0, 0, 0.2); border-radius: 5px; } #start_btn6 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn6 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn6 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of April 20th, 2026

More reading

• 5 TSX Dividend Stocks for Steady Cash Flow in Any Market
• 5 Dividend Stocks Worth a Spot in Nearly Any Canadian Portfolio
• 5 TSX Dividend Stocks for Steady Cash Flow in Any Market

Fool contributor Andrew Button has no positions in the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.