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A month-to-month earnings machine inside a Tax-Free Financial savings Account (TFSA) sounds glamorous, nevertheless it runs on a number of boring guidelines. You want a payout you’ll be able to depend on, money move that covers it, and a enterprise that doesn’t depend on good markets to gather hire or charges. You additionally want to look at the trade-off between yield and security, as the best yield typically flashes a warning signal. So let’s take a look at one providing all of it up on a silver platter.

AP

Allied Properties REIT (TSX:AP.UN) gives a really particular flavour of month-to-month earnings. It owns and operates distinctive city workspace in Canada’s main cities, with a deal with knowledge-based tenants that need amenity-rich, well-located house. The dividend inventory doesn’t attempt to win the suburban workplace sport. It leans into character buildings, mixed-use pockets, and a “folks really wish to come right here” strategy that may stand out as workplace demand normalizes.

Operationally, Allied has not sat nonetheless. In Q3 2025, it reported occupied and leased space of 84% and 87.4%, and it leased 881,628 sq. ft within the quarter, together with a notable renewal with Google at The Breithaupt Block in Kitchener. It additionally pushed non-core property gross sales and focused extra closings into 2026. Nice information, as asset gross sales can assist it pay down debt and calm the curiosity expense line that has aggravated buyers.

Earnings assist

Q3 2025 outcomes present the workplace actuality and the resilience within the mannequin on the similar time. Allied reported rental income of $147.9 million, up 0.9% yr over yr, however greater prices and better curiosity expense pressured the underside line. On a cash-flow foundation, it reported funds from operations (FFO) per unit of $0.456 and adjusted FFO per unit of $0.423 for the quarter, and people figures dropped from $0.556 and $0.487 a yr earlier.

The payout protection additionally appeared tight beneath the previous distribution stage. Allied reported an AFFO payout ratio of 106.4% in Q3 2025, which suggests the payout demanded greater than the recurring money move delivered in that quarter. That doesn’t robotically imply catastrophe, nevertheless it does imply the payout left no room for errors.

Trying forward

The ahead outlook depends upon leasing momentum and debt work, not wishful pondering. In its Q3 supplies, administration mentioned it anticipated occupied and leased space at year-end to remain in keeping with Q3 ranges, with same-asset internet working earnings (NOI) down about 1% for 2025 and FFO and AFFO per unit contracting by about 10% for the yr. That was largely because of the slower tempo of lease finalization and better curiosity value. It additionally pointed to monetizing a mortgage receivable secured by 150 West Georgia in Vancouver, with the almost certainly closing window within the first half of 2026.

But there are notes for buyers to contemplate. On Dec. 1, 2025, it introduced a 60% discount within the month-to-month distribution to $0.06 per unit, or $0.72 annualized, all through 2026, and it tied that transfer on to decreasing indebtedness and curiosity expense. That reduce can sting, however it may well additionally prolong the story, as a result of it lowers money leaving the enterprise every month. The valuation appears extra fascinating after the drop, however you continue to have to respect the dangers. The stability sheet stays the swing issue, although. Allied reported internet debt to annualized adjusted EBITDA of 12.3 occasions on the finish of Q3 2025 and a complete debt ratio of 45%, so it nonetheless has work to do.

Backside line

AP.UN can nonetheless play a powerful position in a TFSA earnings plan because it pays month-to-month, it now runs with a reset distribution stage, and administration has put debt discount entrance and centre. That mixture could make the earnings really feel extra sturdy going ahead, even when the yield not appears jaw-dropping. In reality, right here’s what $7,000 may create on the TSX in the present day in dividends alone.

The trade-off comes with the workplace cycle, and you need to anticipate bumps. In order for you a month-to-month payer that may fund your TFSA plan with out fixed tinkering, AP.UN can match, so long as you purchase it with persistence and sensible expectations.