Canada markets open in 7 hours 13 minutes
  • S&P/TSX

    +98.97 (+0.46%)
  • S&P 500

    -43.89 (-0.88%)
  • DOW

    +211.00 (+0.56%)

    +0.0013 (+0.18%)

    -0.71 (-0.85%)
  • Bitcoin CAD

    +1,658.95 (+1.86%)
  • CMC Crypto 200

    +25.32 (+1.80%)

    -36.90 (-1.53%)
  • RUSSELL 2000

    +4.70 (+0.24%)
  • 10-Yr Bond

    0.0000 (0.00%)
  • NASDAQ futures

    +99.75 (+0.58%)

    +0.71 (+3.94%)
  • FTSE

    +18.80 (+0.24%)
  • NIKKEI 225

    +385.95 (+1.04%)

    +0.0006 (+0.09%)

3 of the Best Canadian REITs to Buy Today!

office buildings
Image source: Getty Images

Written by Daniel Da Costa at The Motley Fool Canada

It’s no secret that investing in real estate is one of the best industries to consider. Many Canadians have a dream of saving up to own rental properties one day. And while rental properties can provide attractive passive income potential, there are many advantages to considering the best Canadian REITs to buy and hold in your portfolio.

One of the most significant problems Canadians face when buying a rental property is the significant capital investment needed. Not only do you have to save thousands just for a down payment, but it’s also a considerable risk to take on a mortgage in order to invest in the property.


When it comes to REITs, though, you can start investing with as little as a few hundred dollars. You can also buy the best Canadian REITs in your TFSA and save on all the taxes from the income you earn or the capital gains on your investment.

Another massive benefit of buying REITs is the instant diversification they provide and the fact a professional team manages them. Not only do you not have to do any work to manage the properties you have exposure to, but with assets spread all over the country or potentially multiple countries, you can mitigate some risk while also gaining exposure to the growth potential of other regions.

So, with that in mind, if you’re looking to add a high-quality REIT or two to your portfolio today, here are three of the best in Canada to buy now.

Two top residential REITs to consider today

There’s no question that some of the most popular REITs to buy are residential REITS. And while there are several high-quality residential REITs to consider in Canada, two of the best are Canadian Apartment Properties REIT (TSX:CAR.UN) and Morguargd North American Residential REIT (TSX:MRG.UN).

Canadian Apartment Properties REIT (CAPREIT) is the largest residential REIT in Canada, with properties diversified nationwide. It’s the go-to investment for many Canadians, considering you can gain exposure to more than 50,000 apartment suites or manufactured housing sites.

Furthermore, CAPREIT has an established track record of growing investors’ capital consistently and increasing the distributions it pays to investors. Today, CAPREIT offers a yield of roughly 2.9% and trades at a forward price to funds from operations (P/FFO) ratio of just 19.4 times, below its five-year average of 21.5 times, making it one of the best Canadian REITs to buy now.

Morguard also offers investors attractive diversification, especially south of the border, where most of its assets are located. And in many parts of the U.S., the rental markets haven’t been as tight as they have been up here, giving more organic growth potential as landlords increase the rents they charge.

This was especially helpful over the last few years when surging inflation caused operating costs to skyrocket both in Canada and the U.S.

Morguard was easily able to offset these higher prices and continue to grow its profitability, demonstrating why owning a diversified REIT like Morguard has so many advantages.

Today, Morguard offers investors a yield of roughly 4.6% and trades at a forward P/FFO ratio of just 9.4 times, below its five-year average of 12.9 times, making it one of the best Canadian REITs to buy today.

One of the best REITs that Canadians can buy and hold for years

Finally, if you’re looking for a high-quality stock to buy that’s not a residential REIT, CT REIT (TSX:CRT.UN), the REIT owned by Canadian Tire, is certainly one you’ll want to consider.

Because Canadian Tire is its majority owner and largest tenant, accounting for roughly 90% of its revenue, CT REIT is a highly reliable investment that provides attractive passive income.

Since going public roughly a decade ago, it has never had a year where it didn’t increase its revenue or distribution, including through the pandemic when many retail REITs were impacted.

And today, with the stock trading off its high, not only can you buy it at an attractive discount, but the yield it offers is roughly 6.3%, much higher than its average yield of 5.3% since going public.

So, if you’re looking for some of the best REITs to buy now and boost your passive income, CT REIT is undoubtedly a top choice.

The post 3 of the Best Canadian REITs to Buy Today! appeared first on The Motley Fool Canada.

Should you invest $1,000 in Canadian Apartment Properties right now?

Before you buy stock in Canadian Apartment Properties, consider this:

The Motley Fool Stock Advisor Canada analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Canadian Apartment Properties wasn’t one of them. The 10 stocks that made the cut could potentially produce monster returns in the coming years.

Consider MercadoLibre, which we first recommended on January 8, 2014 ... if you invested $1,000 in the “eBay of Latin America” at the time of our recommendation, you’d have $17,988!*

Stock Advisor Canada provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month – one from Canada and one from the U.S. The Stock Advisor Canada service has outperformed the return of S&P/TSX Composite Index by 35 percentage points since 2013*.

See the 10 stocks * Returns as of 1/24/24

More reading

Fool contributor Daniel Da Costa has no position in any of the stocks mentioned. The Motley Fool recommends Morguard North American Residential Real Estate Investment Trust. The Motley Fool has a disclosure policy.