Got $25,000? Transform a TFSA Into a Cash-Gushing Machine

Got $25,000? In a Tax-Free Savings Account (TFSA), that can feel like a small deposit that suddenly starts paying you back. The account lets eligible income and gains grow without annual tax friction, so every dollar you earn can stay on the field and keep compounding.

Pair that shelter with a steady payer, and you can build an income-generating loop. Cash arrives, you reinvest it, and your next payout starts from a bigger base. That’s how a TFSA turns from a “nice idea” into something that can change a monthly budget. So let’s look at how to make the most of it.

GRT

Granite Real Estate Investment Trust (TSX:GRT.UN) feels relevant right now as investors still crave dependable cash flow while rate chatter refuses to leave the room. Granite owns and manages logistics and industrial buildings, the unglamorous hubs that store, pack, and ship everything from groceries to gadgets. Many leases bake in rent bumps, so inflation does not automatically wipe out progress. When tenants renew, Granite can reset rents, and when it sees value, it can grow through acquisitions and development.

The unit price has not taken a straight path. REITs got hit hard when borrowing costs rose, and sentiment swung wildly as investors tried to guess the next move in rates. Yet today, shares of the dividend stock are up 6% year to date, and 27% in the last year, so you get both opportunity and volatility in one wrapper.

Under the hood, Granite looks like a disciplined landlord. It’s a Canadian-based REIT with a portfolio across North America and Europe, and it reported 147 investment properties with about 62.6 million square feet of leasable area. For Sept. 30, 2025, it reported 96.8% occupancy and 97.1% committed occupancy, plus a 5.5-year weighted average lease term, which helps smooth out the ride. Tenant concentration still matters, though, because Magna represented 27% of annualized revenue.

Earnings support

Now for the numbers that actually move the thesis. In the third quarter of 2025, Granite reported rental revenue and other income of $153 million, up from $141.9 million a year earlier. Net operating income rose to $127.1 million from $119.6 million, which signals stronger building economics. Funds from operations came in at $1.48 per unit versus $1.35 per unit in the prior-year quarter.

The cash coverage looked steady, too. Granite reported adjusted funds from operations of $1.26 per unit, up from $1.22 per unit a year earlier, and it reported an adjusted funds from operations (AFFO) payout ratio of 67% for the quarter. That cushion matters because it supports leasing, upgrades, and growth without forcing drama. It also helps explain why Granite lifted the monthly distribution starting in December 2025 to $0.2958 per unit, or about $3.55 a year.

Looking forward, Granite raised its 2025 outlook to $5.83 to $5.90 in FFO per unit and $5.03 to $5.10 in AFFO per unit, pointing to leasing and renewals as support. After quarter-end, it signed new leases for about 769,000 square feet of previously vacant space and highlighted an in-place occupancy rate of 98%, which can set up steadier cash flow into 2026. On valuation, a simple gut-check helps. At roughly $88.86 per unit, that outlook implies a price-to-FFO around the mid-teens, which feels reasonable for a high-quality industrial portfolio, but rates, currency swings, and tenant concentration can still bite.

Bottom line

So can Granite help turn $25,000 into a TFSA cash-gusher? Here’s what $25,000 could bring in from dividends alone at writing, without even adding a single cent in price increases.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTGRT.UN$86.37289$3.42$988.38Monthly$24,960.93

Reinvest that stream and the snowball can grow quietly in the background. Keep an eye on leasing and financing conditions, but if you want a TFSA that pays you to wait, Granite offers a straightforward way to start.

The post Got $25,000? Transform a TFSA Into a Cash-Gushing Machine appeared first on The Motley Fool Canada.

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Fool contributor Amy Legate-Wolfe has no position in any of the stocks mentioned. The Motley Fool recommends Granite Real Estate Investment Trust. The Motley Fool has a disclosure policy.