Your TFSA Can Make $333 in Monthly, Tax-Free Income

A Tax-Free Savings Account (TFSA) is the best way to target monthly income as high as $333, letting the cash land in your account without tax drag. That matters with monthly payers, since you feel the benefit immediately and you can reinvest faster. The TFSA also keeps things simple. No tracking foreign tax credits, no tax slips that change your mood in April, and no worrying that withdrawals will affect government benefits later. The real trick is picking a monthly payer with cash flow that can actually support the cheque.

APR

Automotive Properties REIT (TSX:APR.UN) owns real estate leased to automotive dealerships and related users. That structure often leads to long leases and predictable rent escalators, which is exactly what monthly income investors want. The theme is boring in the best way. Cars still need servicing, dealerships still need physical locations, and tenants usually do not move on a whim.

Over the last year, the story has leaned on steady growth, not reinvention. The real estate investment trust (REIT) has kept its monthly distribution at $0.81 annualized. That consistency matters because a lot of income investors buy this name specifically to build a “monthly pay” stream in a TFSA. It also signals that management believes the payout fits the cash flow profile.

The business also stayed active on the portfolio side. Management added properties and is leaning on contractual rent increases to lift revenue, while also pruning where it makes sense. In Q3 2025, it noted rental revenue growth from properties acquired after Q3 2024 and rent escalations, partly offset by lower rent after selling the Kennedy Lands in October 2024. That kind of capital recycling can be healthy, but it’s also a reminder that this REIT grows through deals as well as lease clauses, so you want to watch execution.

Into earnings

In Q3 2025, Automotive Properties reported rental revenue of $25.4 million, up 7.9% year over year, and total Cash net operating income (NOI) of $21 million, up 6.5%. Funds from operations rose to $12.9 million, or $0.255 per unit, and AFFO rose to $12.7 million, or $0.252 per unit (diluted). Those are the numbers that keep the monthly distribution honest.

Distribution coverage looked reasonable in that quarter. The REIT paid regular cash distributions of $0.204 per unit in Q3 2025, which worked out to an AFFO payout ratio of about 81%. That is not ultra-conservative, but it’s not reckless either, especially for a property trust that aims to pay monthly. If you want the income to feel safe, you want that payout ratio to stay stable or drift lower over time, not creep higher.

Valuation is where this can start to feel like a TFSA-friendly tool. With the distribution at $0.0685 per month, you get $0.822 per year. The future outlook hinges on the same two levers most REIT investors should watch: steady rent growth and steady financing. Meanwhile, here is how much investors would need to put in if they want $333 per month.

COMPANYRECENT PRICENUMBER OF SHARESANNUAL DIVIDENDANNUAL TOTAL PAYOUTFREQUENCYTOTAL INVESTMENTAPR.UN$11.594,934$0.81$3,996.54Monthly$57,185.06

Bottom line

Here’s the clean takeaway. APR.UN can be a solid TFSA monthly income candidate because the distribution is steady; the Q3 2025 cash flow lines moved the right way, and the payout ratio in that quarter left some breathing room. But it is not a guaranteed smooth ride. Leverage sits in the high-40% range, debt maturities still matter, and the unit price can wobble even if the rent cheques stay calm. If you want tax-free monthly cash and you can handle some real estate volatility, it can fit the job.

The post Your TFSA Can Make $333 in Monthly, Tax-Free Income 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 Automotive Properties Real Estate Investment Trust. The Motley Fool has a disclosure policy.