Transform Your TFSA Into a Cash-Creating Machine With $10,000

There’s something deeply satisfying about earning passive income, especially when you don’t have to pay any tax on it. That’s the beauty of a Tax-Free Savings Account (TFSA). It’s not just for saving; it’s for investing. And when you find the right dividend stock, your TFSA can become a cash-creating machine. One stock that stands out right now is Dream Industrial Real Estate Investment Trust (TSX:DIR.UN). It’s stable, consistent, and generous with monthly payouts. And with $10,000 to invest, you could set yourself up with a reliable stream of income that only grows over time.

A Dream stock

Dream Industrial REIT is in the business of owning and managing industrial properties. These aren’t flashy downtown condos or shopping malls. These are warehouses, distribution centres, and logistics facilities, places that keep the economy running. As of March 2025, it owned 336 high-quality industrial assets totalling over 72 million square feet of gross leasable area. Its properties span Canada, the United States, and Europe, giving it geographic diversification and exposure to strong demand in multiple regions.

While many REITs have struggled with office vacancies or retail slumps, industrial properties have remained in demand. E-commerce and supply chain investments have pushed companies to secure more warehouse space. Dream Industrial has benefited from this trend. In its most recent first-quarter (Q1) 2025 earnings report, it delivered net rental income of $91.7 million, up 6.8% from the year before. Funds from operations (FFO) per unit rose to $0.26, up from $0.24 in Q1 2024. That’s a sign of growing profitability and stability.

Creating cash

Now, let’s talk about what really matters for a TFSA: cash flow. Dream Industrial REIT pays a monthly dividend of $0.058 per unit. That works out to $0.696 per year, giving it a yield of about 6.3% at the current share price of $11.15. If you invest $10,000, you could pick up roughly 900 units. That translates into about $52 a month in tax-free income. And because this is inside a TFSA, you won’t owe a dime to the CRA.

And it gets better. Because the dividend is monthly, you can reinvest more frequently. If you’re not drawing the income right away, you can use a DRIP (dividend-reinvestment plan) to buy more units with each payment. Over time, this adds up. More units mean more dividends, which buys more units. That’s how compounding works in your favour.

More to come

Dream Industrial isn’t just paying a nice dividend; it’s also growing. It acquired $460 million worth of new properties in Q1 alone. That includes more than 1.2 million square feet of gross leasable area. It also renewed and signed new leases for 1.5 million square feet, with rental increases averaging over 23%. These aren’t just small tweaks. These are big moves that increase the bottom line and add value to the portfolio. This growth fuels future dividend increases, which means even more monthly cash down the line.

It’s also managing debt responsibly. The REIT reported a total debt-to-total asset ratio of 36.9%, which is conservative for the industry. Its interest coverage ratio stands at 5.2 times, showing that it’s not stretched too thin. A strong balance sheet is what helps a REIT keep paying distributions even when times get tough. That kind of resilience is key for long-term TFSA investors who want peace of mind.

Bottom line

If you’ve got $10,000 sitting in your TFSA and you’re looking to turn it into a reliable income stream, Dream Industrial REIT is worth a serious look. It’s backed by real property, delivers strong monthly payouts, and has room to grow. You won’t get rich overnight, but you will get paid. And in the world of passive investing, that’s the whole point.

The post Transform Your TFSA Into a Cash-Creating Machine With $10,000 appeared first on The Motley Fool Canada.

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More reading

• 1 Magnificent REIT Stock Down 25% to Buy and Hold Forever
• How I’d Use $7,000 to Build a Monthly Income Fortress in My TFSA
• I’d Put My Entire TFSA Into This Single 6.7% Monthly Payer
• This Rock-Solid Monthly Dividend Stock Is Down 28% and Looks Compelling
• 1 Magnificent Real Estate Stock Down 18% to Buy and Hold Forever

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

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