12 Best REIT Stocks To Buy In Canada Right Now In 2024

In Canada, Real Estate Investment Trusts (REITs) have gained significant attention for their potential to provide stable income and growth. Canadian REITs, in particular, offer a diverse range of opportunities that align with varying investment goals. In this article, we’ll explore the best REIT stocks to buy right now in Canada, along with what makes Canadian real estate stocks an attractive investment opportunity.

Canadian Real Estate Market Stats

National Average Home Price: The average price of a home in Canada in February 2024 was $685,809, which is a 3.5% increase from February 2023
Sales Activity: Home sales dipped slightly in February 2024 compared to January 2024, but overall sales activity has been higher in the last 3 months compared to fall 2023.
Inventory: National home inventory has decreased in 2024. The long-term average is around 5 months, but currently, it’s lower.
Market Growth: The Canadian residential real estate market is expected to reach $69.41 billion by 2028, with a growth rate of 3.2%.

Note: all stats sourced from Statistics Canada & Canadian Real Estate Association.

Are Canadian REIT Stocks A Buy Right Now?

While Canadian REITs have historically provided stable income and potential for capital appreciation, the current market conditions present a unique investment opportunity.

Many Canadian REIT stocks have been lagging behind the market over the past year but with rental income on the rise, that could change in the not-so-distant future.

The performance of REITs can be influenced by economic trends, interest rate changes, and real estate market dynamics.

Assessing the specific sectors within REITs, such as office, retail, industrial, or residential, is crucial since each may respond differently to changing circumstances.

How To Buy The Best Canadian REIT Stocks

Today, the best investing apps make it easy to buy the best Canadian REIT stocks and ETFs.

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Check out our step-by-step guide on how to buy the best Canadian real estate stocks right now.

Click here to sign up for a Questrade account
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Ranking The Best Canadian REIT Stocks To Buy Right Now

RioCan Real Estate Investment Trust (REI.UN)
Choice Properties Real Estate Investment Trust (CHP.UN)
Canadian Apartment Properties REIT (CAR.UN)
Brookfield Property Partners LP (BPY.UN)
SmartCentres Real Estate Investment Trust (SRU.UN)
H&R Real Estate Investment Trust (HR.UN)
Killam Apartment Real Estate Investment Trust (KMP.UN)
NorthWest Healthcare Properties Real Estate Investment Trust (NWH.UN)
Dream Industrial Real Estate Investment Trust (DIR.UN)
Artis Real Estate Investment Trust (AX.UN)
PCT Real Estate Investment Trust (CRT-UN.TO)
Allied Properties Real Estate Investment Trust (AP.UN)

Analyzing The Best Canadian REIT Stocks To Buy On The TSX

In the dynamic landscape of the financial markets, Real Estate Investment Trusts (REITs) have consistently garnered attention for their potential to offer stable income streams and portfolio diversification. Among the bustling array of investment options, the Toronto Stock Exchange stands as a hub for some of the most promising REIT opportunities.

In this section, we delve into the best REIT stocks TSX investors can expect to find in 2024, highlighting the standout performers, along with the market trends and key factors driving their success.

From retail and residential to industrial and healthcare properties, let’s review the best real estate stocks Canada has to offer.

1. RioCan Real Estate Investment Trust (REI.UN) — Best Canadian REIT Stock To Buy in 2024

Rating: ⭐⭐⭐⭐⭐
52 Week Range: 17.85 – 23.59
Avg. Volume: 446,741
Market Cap: 5.707 B
PE Ratio (TTM): 29.69
EPS (TTM): N/A
Earnings Date: November 1-6, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

RioCan REIT is an attractive option for investors seeking income and long-term growth.

Their dominant position with necessity-based tenants in prime locations provides stable rental income. RioCan also invests in development projects, like mixed-use properties, to create additional value.

They have a healthy balance sheet and a history of consistent dividends. While rising interest rates and economic slowdowns are potential risks, RioCan’s focus on essential services and well-located properties helps mitigate them.

Overall, RioCan REIT offers a compelling combination of income, diversification, and strategic development for investors seeking long-term value in Canadian real estate.

2. Choice Properties Real Estate Investment Trust (CHP.UN)

Rating: ⭐⭐⭐⭐⭐
52 Week Range: 12.18-15.77
Avg. Volume: 377,956
Market Cap: 9.451B
PE Ratio (TTM): 8.06
EPS (TTM): N/A
Earnings Date: November 07-13, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

Choice Properties Real Estate Investment Trust (CHP.UN) is a promising investment option in the Canadian real estate sector.

Choice Properties caters to investors seeking a niche play on Canada’s leading grocery chain, Loblaws. Boasting a portfolio brimming with Loblaw-anchored retail spaces, Choice REIT benefits from reliable rental income backed by a well-established tenant and its loyal customer base. This key partnership provides a built-in tenant and customer base, bolstering its potential for sustained cash flows.

CHP.UN’s strategic focus on high-traffic supermarket locations ensures consistent foot traffic and occupancy rates. While primarily focused on existing properties, the Canadian real estate stock also explores development ventures to capitalize on potential rent growth in expanding markets. Choice REIT maintains a strong financial position with a history of consistent dividend payouts, further bolstered by Loblaw’s stability.

However, remember that Choice REIT’s success hinges on Loblaw’s performance and offers limited diversification due to its concentration on a single major tenant.

3. Canadian Apartment Properties REIT (CAR.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐⭐
52 Week Range: 27.11-40.14
Avg. Volume: 5,660
Market Cap: 6.016B
PE Ratio (TTM): N/A
EPS (TTM): N/A
Earnings Date: November 6-10, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

Canadian Apartment Properties Real Estate Investment Trust (CAPREIT) presents a compelling investment opportunity in the real estate market.

Unlike most REIT stocks Canada offers, CAPREIT focuses on residential properties. With a strong foothold across the country, the Canadian real estate stock offers a diversified portfolio of rental apartments that cater to a wide range of tenant needs.

The trust strategically selects properties in high-demand urban locations, fostering consistent tenant occupancy and rental income. CAPREIT’s emphasis on affordable and quality housing positions it well in a market with robust rental demand.

The Canadian REIT stock also employs an experienced management team that combines a disciplined approach to property acquisitions with value-add initiatives, enhancing the overall value of its portfolio. Its consistent occupancy rates and rental income streams, driven by the essential nature of housing, provide stability to investors seeking reliable returns.

4. Brookfield Property Partners LP (BPYPP) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐⭐
52 Week Range: 13.86-21.86
Avg. Volume: 14,321
Market Cap: 9.389B
PE Ratio (TTM): 6.47
EPS (TTM): N/A
Earnings Date: N/A
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

Brookfield Property Partners LP (BPY.UN) offers a diversified play on the commercial real estate market for investors seeking income, capital appreciation, and access to Brookfield Asset Management’s expertise.

BPY.UN boasts a well-rounded portfolio across multiple sectors, including office, retail, industrial, and logistics. This diversification helps mitigate risk by offering exposure to various market segments.

Furthermore, the Canadian REIT leverages its relationship with Brookfield Asset Management, a global leader in alternative investments, to source high-quality assets and unlock potential through active management. Their focus on strategic acquisitions and development projects positions them for future growth.

While economic downturns could impact tenant demand, BPY’s diversified portfolio and experienced management team can help navigate these challenges.

Overall, Brookfield Property Partners offers a compelling option for investors seeking a diversified income stream and long-term value creation in commercial real estate.

5. SmartCentres Real Estate Investment Trust (SRU.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐⭐
52 Week Range: 23.24-29.14
Avg. Volume: 212,245
Market Cap: 4.1B
PE Ratio (TTM): 13.38
EPS (TTM): N/A
Earnings Date: November 9-13, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

One of the best REIT stocks in Canada, SmartCentres Real Estate Investment Trust focuses on retail and mixed-use properties across the country.

The Canadian real estate stock boasts a national portfolio of strategically located shopping centres anchored by essential service tenants like grocery stores and discount retailers. This focus on necessity-based businesses helps generate stable rental income streams with lower vacancy risks.

With a strong history and a strategic partnership with the Canada Pension Plan Investment Board (CPP Investments), SmartCentres REIT offers exposure to stable, income-generating real estate assets. In addition to stability, SmartCentres’ strategic partnership with CPP Investments brings valuable resources and expertise to the table.

SmartCentres’ income-oriented approach aligns with investors aiming for regular cash flow. The REIT maintains a healthy balance sheet and has a long history of consistent dividend payouts.

Overall, SmartCentres REIT offers a compelling option for investors seeking a combination of income, potential for development upside, and exposure to the Canadian retail market with a focus on essential goods.

6. H&R Real Estate Investment Trust (HR.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐⭐
52 Week Range: 7.52-7.59
Avg. Volume: 8,613
Market Cap: 2.138B
PE Ratio (TTM): 250.67
EPS (TTM): N/A
Earnings Date: November 13-17, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

H&R Real Estate Investment Trust (HR.UN) offers exposure to a diverse portfolio of properties across Canada and the United States.

With a strong history and a strategic mix of property types, including office, retail, industrial, and residential, the Canadian REIT stock offers a wide range of income-generating assets.

HR.UN’s geographically diversified portfolio is strategically positioned in key urban markets, ensuring a steady flow of rental income from well-located properties. The Canadian real estate stock’s ability to attract and retain reputable tenants further bolsters income stability and contributes to its long-term performance.

Overall, the REIT stock’s commitment to maintaining high-quality properties in Canada and the U.S. supports its reputation as a reliable real estate investment.

7. Killam Apartment Real Estate Investment Trust (KMP.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐
52 Week Range: 14.62-19.12
Avg. Volume: 208,029
Market Cap: 2.074B
PE Ratio (TTM): 14.24
EPS (TTM): N/A
Earnings Date: November 6-10, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

When it comes to the best REIT stocks for TSX investors, Killam Apartment Real Estate Investment Trust stands out above the pack.

The Canadian REIT stock focuses on residential properties across Canada and is a great option for income-seeking investors.

Killam’s strategic approach to property acquisition and management ensures a consistent stream of rental income. Thanks to its commitment to maintaining attractive and well-maintained living spaces,

One of Canada’s top real estate stocks to buy in 2024, Killam REIT focuses on maintaining strong relationships with its tenants and communities, enhancing its reputation, and contributing to its long-term success.

The REIT stock has a strong track record of occupancy stability, and tenant retention contributes to its reliable cash flows. Not to mention, Killam REIT’s growth strategy includes both acquisitions and development projects, positioning it well for potential capital appreciation over time.

As a well-established player in the market, Killam REIT offers investors an opportunity to gain exposure to Canada’s resilient and essential rental housing sector.

8. NorthWest Healthcare Properties Real Estate Investment Trust (NWH.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐
52 Week Range: 6.06-13.11
Avg. Volume: 991,790
Market Cap: 1.521B
PE Ratio (TTM): N/A
EPS (TTM): N/a
Earnings Date: November 13-17, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

NorthWest Healthcare Properties Real Estate Investment Trust (NWH.UN) is a smart opportunity to invest in real estate that’s all about healthcare. This Canadian REIT stock provides exposure to properties like hospitals and medical centers.

NWH.UN focuses on places that offer services that are essential for our health and well-being. This means there’s a stable demand for these spaces, which can lead to reliable income for investors.

Ranked among the top health care REIT stocks in Canada, NWH.UN takes good care of its properties to make sure they’re up-to-date and suitable for healthcare providers. Essentially, they make sure that doctors have the best facilities to take care of patients.

This approach helps NWH.UN generate income, and a portion of that income is shared with investors as distributions, like getting paid rent.

9. Dream Industrial Real Estate Investment Trust (DIR.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐
52 Week Range: 13.35-13.53
Avg. Volume: 630,795
Market Cap: 3.696B
PE Ratio (TTM): 16.13
EPS (TTM): N/A
Earnings Date: October 30-November 03, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

Dream Industrial Real Estate Investment Trust (DIR.UN) provides an exciting chance to invest in Canadian real estate.

The REIT stock specifically focuses on industrial properties across Canada. Think of it as investing in warehouses and distribution centers. With DIR.UN, you get a slice of the growing demand for spaces used for online shopping and delivering goods, which is becoming more important daily.

The trust carefully manages and improves its properties over time, making sure they stay modern and attractive for businesses. These properties are like the backbone of companies’ supply chains. This strategy helps DIR.UN creates a steady income that it shares with investors, kind of like getting rent from tenants.

Remember, while DIR.UN has great potential; it’s good to be aware of risks like economic changes and shifts in demand for industrial spaces.

10. Artis Real Estate Investment Trust (AX.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐⭐
52 Week Range: 6.58-11.62
Avg. Volume: 464,020
Market Cap: 741,076M
PE Ratio (TTM): N/A
EPS (TTM): N/A
Earnings Date: November 1-6, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

Artis Real Estate Investment Trust (AX.UN) presents a compelling opportunity for investors seeking exposure to a diversified portfolio of real estate assets.

The trust focuses on various property types, including office, retail, and industrial properties. These assets provide the potential for income generation through lease agreements and rental income, offering investors a chance to participate in the real estate market’s income stream.

Artis REIT’s management strategy involves actively managing and enhancing the properties within its portfolio.

By doing so, the trust aims to create a consistent source of rental income, which it then distributes to investors as part of its commitment to delivering value.

11. PCT Real Estate Investment Trust (CRT-UN.TO) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐
52 Week Range: 14.37-14.61
Avg. Volume: 102,285
Market Cap: 3.394B
PE Ratio (TTM): 13.00
EPS (TTM): N/A
Earnings Date: November 6-10, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

With a specialized focus on retail properties, CT REIT provides investors an opportunity to participate in the commercial real estate market.

The Canadian real estate stock’s portfolio consists of well-located retail properties that host reputable brands and essential services, aligning with the core of consumer spending.

CT REIT’s strength lies in its robust tenant base, secured through long-term leases with established retailers. This stability translates into consistent rental income, providing investors with a reliable cash flow stream.

The Canadian REIT stock’s commitment to quality properties and prime locations enhances its potential for income and value appreciation over time.

12. Allied Properties Real Estate Investment Trust (AP.UN) — History of Dividend Payments & Potential Growth

Rating: ⭐⭐⭐
52 Week Range: 20.16-33.05
Avg. Volume: 287,582
Market Cap: 2.596B
PE Ratio (TTM): 46.11
EPS (TTM): N/A
Earnings Date: October 24-October 30, 2024
Forward Dividend & Yield: N/A
Ex-Dividend Date: N/A

Allied Properties Real Estate Investment Trust (AP.UN) offers an avenue to invest in the modern office landscape.

One of the top office real estate stocks in Canada, it focuses on properties that cater to the needs of the modern workforce, including office spaces in urban environments. These spaces are critical for businesses to operate effectively and accommodate the evolving work landscape.

The Canadian REIT stock aims to attract high-quality tenants and generate consistent rental income by maintaining these properties as modern, efficient, and adaptable workspaces.

Overall, Allied Properties Real Estate Investment Trust is a compelling option for individuals interested in urban real estate and the potential for consistent returns over time.

How We Ranked The Best REIT Stocks in Canada

Financial Performance: We examined historical financial data, including revenue, net income, and funds from operations (FFO), to assess each REIT’s financial stability and growth trajectory.
Dividend Yield: The dividend yield was a crucial factor in our ranking, reflecting the income potential for investors. We considered both the yield itself and its consistency over time.
Property Portfolio: The composition and quality of each REIT’s property holdings were thoroughly reviewed. Diversified portfolios across various real estate sectors were favored.
Management Team: The expertise and track record of the REIT’s management team played a pivotal role. A strong team with a history of successful property management and growth strategies is highly regarded.
Occupancy Rates: We analyzed occupancy rates to gauge the REIT’s ability to generate rental income. Higher occupancy rates indicated strong demand for their properties.
Future Growth: Forward-looking indicators, such as expansion plans, acquisitions, and development projects, were considered to assess the REIT’s potential for future growth.

Comparing The Best REIT Dividend Stocks in Canada

Rank	Company	Symbol	Rating	Market Cap
1	RioCan Real Estate Investment Trust	REI.UN	⭐⭐⭐⭐⭐	171.573B
2	Choice Properties Real Estate Investment Trust	CHP.UN	⭐⭐⭐⭐⭐	20.056B
3	Canadian Apartment Properties Real Estate Investment Trust	CAR.UN	⭐⭐⭐⭐⭐	11.623B
4	Brookfield Property Partners LP	BPY.UN	⭐⭐⭐⭐⭐	22.841B
5	SmartCentres Real Estate Investment Trust	SRU.UN	⭐⭐⭐⭐⭐	5.962B
6	H&R Real Estate Investment Trust	HR.UN	⭐⭐⭐⭐⭐	4.011B
7	Killam Apartment Real Estate Investment Trust	KMP.UN	⭐⭐⭐⭐	3.700B
8	NorthWest Healthcare Properties Real Estate Investment Trust	NWH.UN	⭐⭐⭐⭐	3.457B
9	Dream Industrial Real Estate Investment Trust	DIR.UN	⭐⭐⭐⭐	3.196B
10	Artis Real Estate Investment Trust	AX.UN	⭐⭐⭐⭐	4.696B
11	Pure Industrial Real Estate Trust	AAR.UN	⭐⭐⭐	3.151B
12	Allied Properties Real Estate Investment Trust	AP.UN	⭐⭐⭐	7.847B

What Is A Real Estate Investment Trust in Canada?

A Real Estate Investment Trust (REIT) in Canada is a type of investment vehicle that allows individuals to invest in a diversified portfolio of income-generating real estate properties. REIT stocks provide a way for investors to indirectly invest in real estate without having to own, manage, or directly operate the properties themselves.

What Are the Advantages of REIT Stocks?

It’s important to note that while REIT stocks offer several advantages, they also carry risks associated with real estate investments, such as changes in property values, occupancy rates, interest rates, and economic conditions.

As with any investment, individuals should conduct thorough research and consider their investment goals and risk tolerance before investing in a REIT stock.

Below, we’ll review the top seven advantages of real estate investment trusts in Canada.

1. Income Focus

REIT stocks primarily generate income through the rental and lease payments they receive from their real estate properties. A significant portion of the income generated is distributed to investors through dividends.

2. Tax Advantages

Canadian REIT stocks can qualify for special tax treatment if they meet certain criteria. By distributing most of their taxable income to shareholders, they are not subject to corporate income tax at the entity level. Instead, shareholders are taxed on the dividends they receive.

3. Diversification

Real estate stocks often own a diverse portfolio of properties, which can include commercial properties (office buildings, shopping centers, industrial warehouses) and residential properties (apartment buildings, condos).

4. Liquidity

REIT stocks are listed on stock exchanges, allowing investors to buy and sell shares like any other publicly traded stock. This provides a level of liquidity that direct real estate investments typically lack.

5. Professional Management

Real estate stocks are managed by experienced professionals who handle property acquisition, management, and leasing. This relieves investors from the responsibilities of property management.

6. Dividend Distribution

Canadian Real estate stocks are required by law to distribute a significant portion of their income to shareholders, often around 90% or more. This can make REIT stocks an attractive option for income-focused investors.

7. Investor Accessibility

REITs allow even smaller investors to access the real estate market with relatively small investments, providing exposure to a diversified real estate portfolio that might otherwise be difficult to achieve.

Real Estate Stocks in Canada Explained

Real estate stocks in Canada refer to the shares of companies that are involved in the real estate industry. These companies may own, develop, operate, or manage various types of real estate properties, including residential, commercial, and industrial properties. Investing in real estate stocks allows individuals to gain exposure to the real estate market without directly owning physical properties.

One prominent category of real estate stocks in Canada is real estate investment trusts. These specialized companies own and manage income-generating properties, such as office buildings, shopping malls, apartment complexes, and more. Real estate stocks offer investors an opportunity to invest in a diversified portfolio of properties, typically generating rental income. They are known for distributing a significant portion of their earnings to shareholders in the form of dividends, making them attractive options for income-focused investors.

Do All REIT Stocks Pay A Monthly Dividend?

No, not all REIT stocks pay a monthly dividend. While some REIT stocks do offer monthly dividend payments, the frequency of dividend payments can vary widely among different real estate stocks.

Some REITs may pay dividends on a quarterly basis, semi-annually, or even annually.

The dividend payment frequency of a REIT is often determined by factors like the type of properties the REIT owns, its financial performance, its distribution policies, and its business strategy.

For instance, REIT stocks that own properties with steady and predictable rental income streams might be more inclined to offer monthly dividends, as they can provide a consistent income flow to investors.

Best REIT Dividend Stocks Canada

RioCan Real Estate Investment Trust (REI.UN) — Focuses on retail properties.
Choice Properties Real Estate Investment Trust (CHP.UN) — Primarily owns retail and industrial properties.
Canadian Apartment Properties REIT (CAR.UN) — Specializes in residential properties.
Brookfield Property Partners LP (BPY.UN) — Diversified real estate holdings, including commercial and industrial properties.
H&R Real Estate Investment Trust (HR.UN) — Invests in a mix of retail, office, industrial, and residential properties.
SmartCentres Real Estate Investment Trust (SRU.UN) — Specializes in retail properties anchored by major retailers.
Killam Apartment Real Estate Investment Trust (KMP.UN) — Focuses on residential apartment properties.
NorthWest Healthcare Properties Real Estate Investment Trust (NWH.UN) — Specializes in healthcare real estate, including medical office buildings.
Dream Industrial Real Estate Investment Trust (DIR.UN) — Focuses on industrial properties across Canada.
Artis Real Estate Investment Trust (AX.UN) — Diversified portfolio of commercial properties.
Pure Industrial Real Estate Trust (AAR.UN) — Specializes in industrial properties.
Allied Properties Real Estate Investment Trust (AP.UN) — Focuses on urban office properties and adaptive reuse projects.

Real Estate Investing vs Stocks

Real estate investing and investing in stocks are two distinct investment strategies, each with its own advantages, risks, and considerations.

When investing in real estate directly, individuals become property owners, granting them direct control over property management, potential improvements, and rental income.

On the other hand, investing in stocks involves buying shares in publicly traded companies. This allows investors to share in the profits and losses of a company, through capital appreciation, dividends, and more.

Here’s a quick comparison between real estate investing vs stock investing:

Advantages	Real Estate Investing	Stock Investing
Tangible Asset	Ownership of physical properties	Ownership in companies
Rental Income	Regular income from rental payments	Potential dividends and profits
Appreciation	Potential for property value increase	Potential stock value appreciation
Leverage	Ability to use borrowed money	N/A (typically not applicable)
Hands-On Management	Active involvement in property management	Generally passive investment
Liquidity	Less liquid, property sales take time	More liquid, easy buying/selling
Diversification	Limited diversification with properties	Wide range of companies available
Passive Management	N/A (requires active management)	Less involvement in operations
Market Volatility	Less volatile, stable market	More volatile, frequent fluctuations
Capital Requirements	Higher initial investment required	Lower initial investment possible
Income vs. Growth	Emphasis on rental income	Emphasis on capital appreciation

How To Choose Between Real Estate Investing vs Stocks

Risk Tolerance: Real estate tends to be less volatile, but it requires active management. Stocks can offer higher returns but come with greater market risk.
Time Commitment: Real estate often requires more time and effort due to property management. Stocks can be more hands-off.
Capital Requirements: Real estate typically requires a larger upfront investment, while stocks allow for investments with lower initial capital.
Diversification: Stocks offer easier diversification due to the range of companies available. Diversifying in real estate might require multiple properties.
Income vs. Growth: Real estate can provide regular rental income, while stocks may focus more on capital appreciation and dividends.

Investing in Real Estate vs REIT Stocks

Investing in real estate and investing in REIT stocks represent two distinct avenues for gaining exposure to the real estate market, each with its own set of advantages, considerations, and potential outcomes.

Real estate investing involves purchasing physical properties for the purpose of generating rental income and potential property value appreciation. It requires hands-on management, offering direct control over properties and the potential for leveraging.

This approach demands higher upfront capital, is less liquid, and carries localized market risk.

In contrast, REIT stocks provide exposure to a diversified portfolio of real estate assets managed by professionals. Real estate stocks offer liquidity through stock exchanges, require lower initial investment, and often distribute dividends, which can be a source of passive income for investors.

However, REIT stock investors have indirect ownership and limited control over property decisions. Real estate stocks can also be subject to market volatility and interest rate sensitivity.

Stocks vs Real Estate Historical Returns

The best Canadian stocks have routinely outperformed the real estate market in Canada.

Over the long run, buying shares in the S&P 500 has returned more than double the profits for investors compared to real estate. S&P 500 investors have returned about 10 percent annually on average compared to between 3 and 4 percent for real estate.

However, stock market investors pay the price in the form of volatility.

Types of REIT Stocks in Canada

Canadian REIT stocks offer investors a diverse range of options to access the real estate market.

From debt instruments to rental income and property ownership, these REITs come in various forms, each tailored to specific strategies and investor preferences. There are four main types of REIT stocks in Canada: equity REITs, mortgage REITs, PLNRs, and private REITs.

Let’s go over the different types of REIT stocks Canada has to offer.

Equity REITS

Equity REITs are a type of investment vehicle that primarily focuses on owning and managing income-producing real estate properties.

These properties can include a wide range of assets, such as commercial buildings, residential complexes, office spaces, retail centers, industrial facilities, and more. The key characteristic of equity REITs is that they generate revenue through the collection of rent from tenants who occupy these properties.

Equity REITs offer investors the opportunity to invest in a diversified portfolio of real estate assets without having to directly own and manage properties themselves. When you invest in equity REITs, you’re essentially buying shares in the trust, making you a partial owner of the underlying real estate holdings

Here is a summary of what Equity REITs have to offer:

Rental Income
Diversification
Liquidity
Professional Management
Passive Income & Capital Appreciation
Market Exposure

Mortgage REITS

Mortgage REITs are a type of investment vehicle that primarily focuses on investing in mortgages and other real estate-related debt securities.

Unlike equity REITs that own physical properties, mortgage REITs invest in loans and mortgages tied to real estate properties. These loans can include residential mortgages, commercial mortgages, and other real estate-related debt instruments.

The primary way mortgage REITs generate revenue is by earning interest income from the mortgages and loans they hold. They often borrow money at short-term interest rates and use that capital to invest in higher-yielding mortgage securities.

The difference between the interest earned from their mortgage investments and the interest paid on their borrowed funds is known as the “spread,” which constitutes their income.

Here is a summary of what mortgage REITs have to offer:

Interest Income
Leveraging
Dividends

Public Non-Listed REITS

Public non-listed REITs, often referred to as PNLRs or non-traded REITs, are a type of real estate investment vehicle that combines features of both publicly traded REITs and traditional private real estate investments.

These REITs are registered with the Securities and Exchange Commission (SEC) and are subject to regulatory oversight, but they are not listed on stock exchanges like traditional publicly traded REITs.

Here is a summary of what PNLRs have to offer:

Registration & Regulation
Liquidity
Dividend Income
Capital Appreciation
Long-Term Investment Horizons

Private REITS

Private REITs are investment vehicles that focus on real estate assets and operate similarly to publicly traded REITs but with a key distinction — they are not traded on public stock exchanges.

Instead, private REITs offer ownership opportunities to a select group of accredited investors and typically have limited liquidity compared to publicly traded securities.

Key points about Private REITs include:

Exclusive Access
Unique Investment Strategies
Liquidity
Diversification
Professional Management
Potential Returns
Investment Minimums

Canadian REIT ETFs

ETFs offer a way for investors to gain diversified exposure to the real estate sector without having to pick individual REIT stocks.

These Canadian ETFs allow investors to invest in a basket of REIT stocks, providing diversification and potentially lower risk compared to holding individual stocks.

Here are five of the best Canadian REIT ETFs to buy now.

iShares S&P/TSX Capped REIT Index ETF (XRE)

Tracks the S&P/TSX Capped REIT Index, which includes a broad range of Canadian REITs
Provides exposure to various types of REITs, including office, retail, industrial, and residential

BMO Equal Weight REITs Index ETF (ZRE)

Follows the Solactive Equal Weight Canada REIT Index
Offers equal-weight exposure to Canadian REITs across different sectors

Horizons S&P/TSX Capped REIT Index ETF (HCRE)

Seeks to replicate the performance of the S&P/TSX Capped REIT Index
Offers exposure to Canadian REITs in the S&P/TSX Composite Index

Vanguard FTSE Canadian Capped REIT Index ETF (VRE)

Aims to track the performance of the FTSE Canada All Cap Real Estate Capped 25% Index
Provides broad exposure to Canadian real estate stocks

First Asset Canadian REIT ETF (RIT)

Seeks to replicate the performance of the DEX Real Estate 25 Index
Focuses on Canadian REITs with a balanced sector allocation

REIT Penny Stocks

REIT penny stocks are Real Estate Investment Trusts that trade at low prices, typically under $5 per share. These stocks are considered penny stocks in Canada due to their low share prices and are associated with higher risk and potential volatility. REITs are companies that own, operate, or finance income-generating real estate properties.

REIT penny stocks specifically refer to REITs whose shares trade at relatively low prices, making them more accessible to some investors but also potentially subject to greater price fluctuations.

Here are three of the best REIT penny stocks to buy right now.

Southerly Hotels Inc. (SOHO)
Nexus Industrial (NXR.UN)
ARMOUR Residential REIT, Inc. (ARR)

Investing Accounts That Can Hold REIT Stocks in Canada

REIT stocks can be held in various types of investment accounts, including registered and non-registered accounts.

Canadians can buy REIT stocks in their TFSA, RRSP or FHSA accounts and benefit from tax-free growth. They can also buy and hold REITs in non-registered cash and margin accounts to further mitigate their risk.

We’ll give a brief overview of the different accounts to buy and hold REIT stocks.

Non-Registered Accounts — Cash & Margin Accounts

Non-registered accounts are general investment accounts that are not associated with specific tax advantages or restrictions.

These cash and margin accounts can hold a wide range of investments, including stocks, bonds, ETFs, REITs, mutual funds, and more.

TFSA — Tax-Free Savings Account

A Tax-Free Savings Account is a registered savings account in Canada that allows individuals to save and invest money without paying tax on the capital gains earned on their investments.

REIT stocks can be held within a TFSA, and any dividends or capital gains earned are tax-free.

In Canada, investing in TFSA stocks can be a powerful way to grow your wealth over time without incurring any tax penalties.

RRSP — Registered Retirement Savings Plan

An RRSP is a tax-advantaged savings account designed to help Canadians save for retirement. RRSP investing strategies are often low-risk, making REIT stocks a popular choice when saving for retirement.

REIT stocks can be held within an RRSP, and any income or capital gains earned within the account are tax-deferred until withdrawn during retirement.

RRSPs are also one of the best accounts to buy and hold Canadian bank stocks and blue-chip stocks in Canada that pay dividends.

FHSA — First Home Savings Account

FHSA accounts are designed to help Canadians save up to buy their first home.

Homebuyers in Canada can use this account enjoy the benefits of both TFSA and RRSP accounts while saving for home ownership. FHSA contributions and all capital gains are tax-free, meaning First Home Savings Accounts can actually help Canadians buy their dream home faster.

In Canada, an FHSA can hold stocks, bonds, ETFS, and other securities, including REITs.

Best Stock Trading Apps For Buying Canadian REIT Stocks

Here are the best stock trading apps for buying Canadian REIT stocks right now.

Questrade: Best Stock Trading App for Buying REIT ETFs

Questrade is a popular online brokerage platform that offers a user-friendly interface and a range of investment options. It allows you to trade Canadian REIT stocks and provides tools for research, analysis, and portfolio management. With competitive pricing and various account types, Questrade is a go-to choice for investors seeking to buy and sell REIT stocks in Canada.

Wealthsimple: Buy Canadian REIT Stocks Commission-Free

Wealthsimple provides an easy-to-use app for investors interested in Canadian REIT stocks. It’s known for its user-friendly interface, automated features, and fractional shares, allowing you to invest with smaller amounts. Wealthsimple offers a balanced mix of simplicity and features, making it suitable for both beginners and experienced investors.

Interactive Brokers: Low Fees For REIT Stocks in Canada

Interactive Brokers is a comprehensive platform that caters to active traders and investors interested in Canadian REIT stocks. It offers a wide range of investment options, advanced trading tools, and research capabilities. While more suited for those with trading experience, Interactive Brokers provides access to various markets and asset classes, including REITs.

How To Invest In The Best REIT Stocks Canada Has To Offer

Investing in Canadian REIT stocks involves a strategic approach. Begin with thorough research, understanding REIT types, performance metrics, and sector specifics.

By following the steps below, Canadians can navigate the REIT sector with confidence and make informed investment decisions.

Step 1: Research and Education

Before investing, take the time to research and educate yourself about the Canadian REIT market. Understand the different types of REITs, their performance, and the real estate sectors they focus on. Familiarize yourself with key metrics, such as dividend yield, funds from operations (FFO), and occupancy rates.

Step 2: Define Your Investment Goals

Determine your investment objectives. Are you seeking regular income through dividends, capital appreciation, or a combination of both? Your goals will guide your REIT selection and investment strategy.

Step 3: Choose a Reliable Brokerage

Select a reputable brokerage platform that offers access to Canadian REIT stocks. Look for competitive trading fees, research tools, and user-friendly interfaces. Ensure the platform aligns with your investment needs.

Step 4: Diversify Your Portfolio

Avoid putting all your funds into a single REIT. Diversification across different sectors and property types can help spread risk. Consider allocating funds to various REITs that match your investment goals.

Step 5: Analyze and Select REITs

Conduct thorough research on individual REITs. Examine their financial performance, property portfolio, management team, and growth prospects. Evaluate metrics such as occupancy rates, rent growth, and geographic diversification.

Step 6: Monitor Performance

After investing, regularly monitor the performance of your chosen REITs. Stay updated on market trends, economic conditions, and any changes in the real estate sector that might impact your investments.

Step 7: Stay Informed

Continuously educate yourself about the Canadian real estate market and the factors affecting it. Attend webinars, read industry reports, and follow reputable financial news sources to make informed investment decisions.

How To Buy Canadian REIT Stocks

Follow our step-by-step guide to sign up for Questrade, one of the best investing apps in Canada.

Step 1: Choose a Brokerage

Select a reputable online brokerage platform that offers access to Canadian stock markets. Our stock market analysts recommend Questrade as the No. 1 stock trading app in Canada.

Click here to sign up for a Questrade account and receive $50 in free trades to get started.

Step 2: Open an Account

Sign up for an account with the chosen brokerage. Provide necessary personal and financial information to complete the account setup process.

Step 3: Fund Your Account

Deposit funds into your brokerage account. This can be done through various methods, such as bank transfers, electronic funds transfers, or checks.

Step 4: Research and Selection

Research and identify the Canadian REIT stocks you wish to buy. Consider factors such as the REIT’s sector, performance, dividend history, and growth potential.

Step 5: Place an Order

Log in to your brokerage account and navigate to the trading platform. Enter the ticker symbol of the chosen REIT stock and select the number of shares you want to buy. Choose your order type and click ‘Buy’. Many brokers will also ask you to review and confirm your purchase.

What Is The Best REIT Stock The Buy Right Now In Canada?

Determining the “best” REIT stock to buy right now in Canada depends on your individual investment objectives, risk tolerance, and market conditions.

However, there is one well-regarded REIT that has historically shown strong performance and exhibits characteristics often sought by investors.

Brookfield Property Partners LP (BPY.UN), part of the Brookfield Asset Management group, has a diversified portfolio of properties globally, including office, retail, and industrial spaces.

With a strong management team and a history of strategic acquisitions, BPY.UN has the potential for income and capital appreciation.