By Amy Legate-Wolfe at The Motley Fool Canada
Income feels better when it shows up often. That’s why monthly dividend stocks can work so well inside a Tax-Free Savings Account (TFSA). The cash can land again and again, without creating a tax bill inside the account. For investors who want a steady stream rather than one or two big cheques each year, real estate investment trusts (REIT) can do much of the work.
Even split
A $50,000 TFSA split across SmartCentres REIT (TSX:SRU.UN), Choice Properties REIT (TSX:CHP.UN), and Allied Properties REIT (TSX:AP.UN) could create nearly constant income because all three pay monthly. Split evenly, that’s about $16,667 in each stock. Based on recent forward yields near 6.3% for SmartCentres, 4.9% for Choice, and 7.1% for Allied, the portfolio could generate roughly $3,041 per year, or about $253 per month.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | ANNUAL DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CHP.UN | $15.96 | 1,044 | $0.78 | $814.32 | Monthly | $16,662.24 |
| SRU.UN | $29.18 | 571 | $1.85 | $1,056.35 | Monthly | $16,661.78 |
| AP.UN | $10.25 | 1,626 | $0.72 | $1,170.72 | Monthly | $16,666.50 |
That’s not pocket change. It’s grocery money, utility-bill money, or reinvestment fuel. Better yet, the TFSA shelters the distributions, so investors can let the cash build or buy more units over time. So let’s look at why these top stocks could work for investors.
SRU
Necessity retail still holds up better than many flashier property types. SmartCentres stock owns shopping centres across Canada, with Walmart as a key tenant. That gives it traffic, scale, and a simple story. People still need groceries, pharmacy items, and everyday goods.
The latest results showed solid footing. SmartCentres stock reported strong Q1 2026 leasing momentum, with 98.6% occupancy and 11.5% rental growth on lease renewals excluding anchors. It also continues to work through mixed-use development projects that could unlock value from land it already owns.
The risk is interest rates and development timing. REITs feel pressure when borrowing costs stay high, and development can also take years. Still, SmartCentres stock pays about $0.15 per unit each month, which gives investors immediate income while they wait.
CHP
Choice Properties brings the most defensive feel of the group. It owns grocery-anchored retail, industrial, mixed-use, and residential properties, with Loblaw as its most important tenant. That connection gives Choice a sturdy base because grocery traffic doesn’t disappear when consumers get cautious.
Choice reported Q1 2026 funds from operations per unit of $0.27, up 2.7% year over year. Same-asset net operating income (NOI) rose 3% on a cash basis. The REIT also achieved long-term renewal leasing spreads of 21.8%, a strong sign that tenants still want its space.
For TFSA investors, the appeal comes from consistency. Choice pays about $0.06 per unit each month, or $0.77 annualized. The yield doesn’t look as high as the others, but the lower yield reflects the quality of the tenant base and the steadier profile. The risk is valuation. Choice often trades at a premium to weaker REITs.
AP
Allied Properties adds more upside, but also more risk. The REIT owns urban office and data-centre-connected properties in major Canadian cities. Office remains a tough area, and Allied cut its distribution after higher rates and weaker demand hit the sector. That’s the scar investors can’t ignore.
Yet the turnaround case has improved. In Q1 2026, Allied reported same-asset NOI growth of 10.4% from its rental portfolio. Its occupied area reached 85%, and liquidity sat at $707.8 million. The monthly distribution now sits at $0.06 per unit, or $0.72 annualized.
Allied won’t suit every income investor as office risk remains real. But the lower payout gives it room to repair the balance sheet and keep investing in better assets.
Bottom line
Together, these three REITs create a balanced TFSA income basket. SmartCentres stock offers retail income, Choice adds defensive stability, and Allied adds recovery potential.
A $50,000 split won’t make anyone rich overnight, but it can create monthly cash, tax-free compounding, and a portfolio that pays investors to stay patient. Investors can also reinvest the monthly cash while prices remain depressed.
That can slowly lift future payouts without adding new money. The biggest key is balance. Don’t chase the highest yield alone. Instead, mix quality, recovery potential, and patience over many years ahead.
The post How to Build a $50,000 TFSA That Throws Off Nearly Constant 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 SmartCentres Real Estate Investment Trust and Walmart. The Motley Fool has a disclosure policy.
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