This Simple TFSA Plan Could Pay You Monthly in 2026

You don’t have to be a genius to earn monthly passive income from your Tax-Free Savings Account (TFSA). A simple investment plan is sufficient.

A simple TFSA plan for 2026

Identify investments that have consistently delivered passive income and continue to do so. Consider scenarios that could put income at risk, and invest in an alternative to offset downside risk while preserving upside potential. It’s all about balancing risks and rewards by investing in contrarian assets where one’s risk is another’s reward.

A TFSA monthly payout from royalty

Imagine owning a piece of land where you find oil. You can live in luxury for generations without doing anything. Freehold Royalties (TSX:FRU) holds many such oil wells, and it doesn’t leave oil discovery to chance. The company invests in finding and acquiring land where there is oil. It leases the land to oil companies, like ExxonMobil and Canadian Natural Resources, to dig wells and extract oil in exchange for royalties.

The royalty amount depends on the oil price and volumes produced. No operational or environmental risks. The only risk it faces is reduced investments in oil development and the transition to green energy. Because then oil companies won’t dig wells, and Freehold still has to pay the debt.

The acquisition of U.S. assets in the last five years, particularly in the oil-abundant Permian Basin, played a pivotal role in Freehold’s performance. It has the lowest breakeven of $43 per barrel and draws a 34% premium to Canada because of premium light oil and lower transportation costs to the Gulf Coast market. The company is using this energy upcycle to reduce debt and buy back shares. Its 2025 net debt stood at $268.3 million, which is 1.1 times its funds from operations (FFO) and below its target range of 1.5.

Lower debt gives Freehold financial flexibility in these uncertain times. Freehold is committed to maintaining its $0.09 monthly dividend at a US$50/barrel West Texas Intermediate crude price, aiming to distribute 60% of its FFO as dividends, although it stood at 75% in 2025.

TFSA monthly income from rent

While Freehold has a solid 28-year track record of paying dividends, economic and oil crises have previously impacted its dividends. It slashed dividends in eight years, including the 2009 Global Financial Crisis, the 2014-15 oil crisis, and the 2020 pandemic.

Although Freehold has strengthened its balance sheet and improved resistance to crisis, there is no harm in having a backup for any dividend risks of Freehold. One company that stands out during a crisis is SmartCentres REIT (TSX:SRU.UN).

SmartCentres has stood the test of time, giving consistent or higher monthly payouts for the last 21 years. Behind its resilience is its largest tenant, Walmart. While SmartCentres earns 23% of its rent from Walmart, a significant portion of its leasable land is occupied by Walmart-anchored stores. In 2020, it took a bold move to intensify its shopping centres into city centres. Since then, it has been building commercial, residential, and warehousing units around its shops, deriving value from the underused parking space.

SmartCentres offers a stable dividend cushion during economic downturns, while Freehold capitalizes on oil market upswings.

Projected monthly income from these stocks

Investing in 1,000 units of each Freehold and SmartCentres can provide $244 in monthly income, equating to an annual yield of 6.5%. This requires an initial investment of $44,720 or a staggered accumulation of shares over time. Since these investments fall under a TFSA, your income withdrawals are tax-free, maximizing your earnings.

Crafting a well-rounded investment strategy is essential to secure consistent income from your TFSA. Subscribe to our newsletter for valuable insights and expert guidance tailored to enhance your financial endeavours.

ShareShare priceMonthly Dividend per shareMonthly Dividend on 1000 sharesInvestmentSmartCentres REIT$27.42$0.1542$154.17$27,420.00Freehold Royalties$17.30$0.09$90.00$17,300.00$244.17$44,720.00

The post This Simple TFSA Plan Could Pay You Monthly in 2026 appeared first on The Motley Fool Canada.

Should you invest $1,000 in SmartCentres Real Estate Investment Trust right now?

When our analyst team has a stock tip, it can pay to listen. After all, the newsletter they have run for a decade, Motley Fool Stock Advisor Canada, is beating the TSX by 9 percentage points.*

They revealed what they believe are 10 TSX Stocks for 2026… and SmartCentres Real Estate Investment Trust made the list – but there are 9 other stocks you may be overlooking.

Don’t miss out on our Top 10 TSX Stocks for 2026, available when you join our mailing list!

Get the 10 stocks instantly #start_btn5 { 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_btn5 a { color: #fff; display: block; padding: 20px; padding-right:1em; padding-left:1em; } #start_btn5 a:hover { background: #FFE300 none repeat scroll 0 0; color: #000; } @media (max-width: 480px) { div#start_btn5 { font-size:1.1em; max-width: 320px;} } margin_bottom_5 { margin-bottom:5px; } margin_top_10 { margin-top:10px; }

* Returns as of February 17th, 2026

More reading

• Build a Cash-Gushing Passive-Income Portfolio With $14,000
• Rising Oil Prices Are a Tax on Canadians – Unless You Own These Stocks 
• 2 Safer High-Yield Dividend Stocks for Canadian Retirees
• How $30,000 Split Across Three TSX Stocks Can Generate $1,705 in Dividends
• Brent Crude Above US$100: 3 TSX Stocks That Benefit From Every Dollar It Climbs 

The Motley Fool recommends Canadian Natural Resources, Freehold Royalties, SmartCentres Real Estate Investment Trust, and Walmart. The Motley Fool has a disclosure policy. Fool contributor Puja Tayal has no position in any of the stocks mentioned.