How to Structure a $50,000 TFSA for Practically Constant Income

A tax-free savings account (TFSA) is an ideal tool for making your money work more efficiently. Investors can earn tax-free returns on investments made through their TFSAs up to a specified contribution limit, making it particularly attractive for long-term wealth building.

In today’s relatively low-interest-rate environment, high-quality, monthly-paying dividend stocks can be especially appealing to investors seeking steady income. Among these options, real estate investment trusts (REITs) stand out, as they must distribute at least 90% of their taxable income to shareholders, thereby generating consistent, reliable income streams. As a result, they are particularly well-suited for income-focused investors.

COMPANYRECENT PRICENUMBER OF SHARESINVESTMENTDIVIDENDTOTAL PAYOUTFREQUENCYSRU.UN$27.19919$24,988$0.15417$141.7MonthlyNWH.UN$5.744,355$24,998$0.03$130.7MonthlyTotal$272.3Monthly

For instance, investing $50,000 across the following two REITs could generate more than $270 in monthly income. Let’s take a closer look at these two REITs and what makes them compelling investment opportunities.

SmartCentres Real Estate Investment Trust

First on my list is SmartCentres Real Estate Investment Trust (TSX: SRU.UN), which owns and operates 198 strategically located properties across Canada. The REIT also benefits from a strong tenant base, with about 95% of its tenants having a national or regional presence and more than 60% providing essential services. Supported by its well-located properties and resilient tenant mix, the company usually enjoys a healthy occupancy rate, which stood at 98.6% at the end of the fourth quarter.

Additionally, the REIT has an extensive development pipeline totalling 87.4 million square feet of mixed-use properties, including retail, senior housing, self-storage, and office projects. Of this total, approximately 0.8 million square feet is currently under construction.

Given its defensive, retail-focused portfolio, these expansion projects could support future earnings growth and help sustain its dividend payments. Currently, the REIT pays a monthly distribution of $0.15417 per unit, which translates to a forward yield of about 6.8%.

Northwest Healthcare Properties REIT

Another REIT that I believe is well-suited for income-seeking investors is NorthWest Healthcare Properties REIT (TSX: NWH.UN), which owns and operates 133 healthcare infrastructure properties across six countries. The REIT benefits from long-term lease agreements with tenants that are often backed by government funding, providing greater revenue stability. Additionally, its weighted-average lease expiry is 12.3 years, offering strong visibility into its future cash flows.

Last year, the REIT completed 1.1 million square feet of new, renewed, and extended leases with a strong renewal rate of 88%. Meanwhile, the same-property net operating income increased by 3.1%, and the occupancy rate remained healthy at 96.4% at the end of the year. Additionally, its adjusted funds from operations (AFFO) rose 10.4% to $105.6 million, improving its AFFO payout ratio to 86% from 92% in 2024. Notably, the company’s AFFO payout ratio in the fourth quarter was even stronger at 75%, reflecting improved earnings coverage for its distributions.

The company has also strengthened its balance sheet by selling $560 million worth of non-core assets and using the proceeds to reduce debt. As a result, its debt-to-gross book value improved from 50% at the end of 2024 to 46.4%. Furthermore, its liquidity stood at $465.5 million at the end of 2025, highlighting its solid financial position.

With improving fundamentals and a stronger balance sheet, management remains focused on driving organic growth and pursuing selective acquisitions to support sustainable distributions. Currently, the healthcare REIT pays a monthly distribution of $0.03 per unit, yielding 6.3%.

The post How to Structure a $50,000 TFSA for Practically Constant Income appeared first on The Motley Fool Canada.

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More reading

• Got $10,000? Buy This Dividend Stock for $56.50 in Monthly Passive Income
• A Perfect TFSA Stock: A 6.8% Yield With Constant Paycheques
• 5 TSX Dividend Stocks I’d Jump to Buy When the TSX Pulls Back
• Use a TFSA to Earn $500 a Month With No Tax
• The Top 3 Dividend Stocks I’d Tell Anyone to Buy

Fool contributor Rajiv Nanjapla has no position in any of the stocks mentioned. The Motley Fool recommends NorthWest Healthcare Properties Real Estate Investment Trust and SmartCentres Real Estate Investment Trust. The Motley Fool has a disclosure policy.