Got $14,000? Create Monthly Income in a TFSA

Monthly income changes the mood fast. A Tax-Free Savings Account (TFSA) with $14,000 doesn’t need to sit around waiting for a perfect market. It can start producing cash right away. That’s especially true for investors who want income without creating a tax bill every month. One stock I’d watch for that job is Nexus Industrial REIT (TSX:NXR.UN).

NXR

Nexus pays $0.05 per unit each month, or $0.64 per unit annualized. With a recent yield close to 8%, a $14,000 TFSA investment could produce roughly $1,099 per year. That works out to about $91.58 per month. The actual number will move with the unit price, but the setup looks attractive for investors who want regular cash flow.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTNXR.UN$8.151,717$0.64$1,098.88Monthly$13,993.55

Nexus owns industrial real estate across Canada. Its portfolio focuses on warehouses, logistics space, and light industrial properties. Goods still need to move, store, sort, and ship. E-commerce, manufacturing, food distribution, and local supply chains all need practical space. That gives industrial real estate investment trusts (REIT) a stronger long-term story than many office landlords.

Into earnings

The latest results give investors something to work with. In the first quarter of 2026, Nexus reported net operating income (NOI) growth of 5.4% to $33.8 million. Normalized adjusted funds from operations (AFFO) per unit rose to $0.16, and the normalized AFFO payout ratio improved to 96.6%. That payout ratio still sits high, but the improvement marked a move closer to a covered distribution, which income investors need to see.

Management also expects mid-single-digit industrial same-property NOI growth in 2026 and a normalized AFFO payout ratio below 100% for the year. Nexus doesn’t have much room for mistakes, but the direction looks better than it did when the payout sat above cash flow.

Looking ahead

For a TFSA investor, the simple strategy would look like this. Buy Nexus for monthly cash flow, then reinvest the distributions while the portfolio grows. A $91.50 monthly payout may not sound life-changing right away. But reinvested over years, it can buy more units, which can create more income. That’s where the TFSA shines. The account lets compounding do its work without annual tax drag.

Risks deserve real attention. Nexus carries debt. REITs can struggle when interest rates stay high or lenders tighten. Industrial demand also isn’t bulletproof. Tenants can delay decisions, and some Ontario and Montreal markets have grown more cautious. A payout ratio near 100% leaves less cushion if leasing slows or financing costs rise.

That’s why I wouldn’t put an entire TFSA into one REIT unless an investor already owns a diversified portfolio elsewhere. Nexus can play the monthly-income role, but it shouldn’t carry the whole retirement plan. A better approach would treat it as one income holding beside banks, utilities, pipelines, and broad-market exchange-traded funds (ETF).

Bottom line

Still, Nexus offers a clear pitch today. It owns useful real estate, pays monthly, yields around 8%, and shows improving distribution coverage. For investors with $14,000 in TFSA room and a long-term mindset, this dividend stock could turn idle cash into steady tax-free income.

The key is patience. Monthly income feels great, but wealth still takes time. Let the cash flow build, reinvest when it makes sense, and keep the portfolio balanced.

The post Got $14,000? Create Monthly Income in a TFSA appeared first on The Motley Fool Canada.

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More reading

• A Perfect TFSA Stock: An 8% Yield With Constant Paycheques

Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Nexus Industrial REIT. The Motley Fool has a disclosure policy.