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How to Turn $20,000 into Financial Freedom: Investing in Canadian Real Estate

Real estate has consistently been a favoured route to achieving financial freedom in Canada. However, acquiring such status doesn’t necessarily require owning rental properties or taking out additional mortgages. Starting with just $20,000, it’s possible to develop a substantial real estate collection.

TSX

Through Real Estate Investment Trusts (REITs) that provide steady income and offer long-term growth. This approach is passive, easily available, and well-diversified—exactly what you’d look for in a strategy to become independent of your salary.

Currently, three REITs are particularly noteworthy for those aiming at long-term financial independence. They include:

StorageVault Canada

(

TSX: SVI

),

NorthWest Healthcare Properties REIT

(

TSX: NWH.UN

), and

Granite REIT

(

TSX: GRT.UN

Each one operates in a distinct segment of the real estate market, providing you with a well-rounded investment strategy that doesn’t require direct ownership of tangible properties.

SVI

StorageVault is a self-storage company that’s been growing steadily for years. Canadians are downsizing, moving, or just running out of space, and that demand isn’t going anywhere. In Q1 2025, StorageVault reported revenue of $76.3 million, up from $71.4 million a year ago. Its net operating income hit $47.7 million, and adjusted funds from operations climbed 2% year-over-year to $17 million. The company also completed $126.2 million in acquisitions, which means more facilities, more tenants, and more cash flow coming in.

StorageVault has developed a robust strategy through organic growth and strategic acquisitions. While it pays a modest dividend of 0.31%, the majority of its profits are being reinvested to support upcoming expansions, potentially resulting in increased shareholder value.

value

Over time, if your focus is on compounding, this option holds significant promise.

NWH

NorthWest Healthcare REIT is quite distinct from others, which precisely aligns with our strategy. This entity holds properties such as hospitals, clinics, and medical offices both within Canada and internationally. Real estate focused on healthcare stands among the sturdiest investment categories available. Regardless of economic conditions, people consistently require health services, leading to extended lease agreements typically signed by governmental bodies or major operators.

In the fourth quarter of 2024, NorthWest announced a year-over-year rise in AFFO by 12%, along with a quarterly growth of 9%. They managed to sell non-core assets worth $1.4 billion and utilized these funds effectively to reduce their debt by more than $1 billion. This strategic decision proves particularly wise under current high-interest conditions. Their real estate investment trust (REIT) maintains an impressive weighted average lease term of 13.6 years and boasts robust tenancy levels, ensuring reliable rental revenue. Additionally, they offer a monthly distribution yielding 7.6% as stated here. For those seeking stable supplementary income, this REIT stands out as difficult to surpass.

GRT

Next up is Granite REIT, which has been a longstanding favorite amongst institutional investors due to its extensive holdings in industrial real estate. The company boasts an array of properties including warehouses, distribution centers, and production facilities spanning both North America and Europe. These assets have grown increasingly crucial with the surge in online shopping and the expanding needs of supply chain networks.

In the first quarter of 2025, Granite announced revenues totaling $153.9 million, marking a rise of 10.7% compared to the previous year. The Net Operating Income (NOI) climbed to $125.7 million, with the company’s holdings covering an area exceeding 63 million square feet. Granite stated a monthly distribution rate of $0.2833 per unit, translating into a yield of 5.1%. While this might not be the most generous offer around, it benefits from solid financial backing and consistent tenant occupancy. Consider this investment as both a growth driver and income source for stability.

Bottom line

When constructing a $20,000 investment portfolio, consider dividing your funds as follows: allocate $7,000 to StorageVault for potential growth, invest $7,000 in NorthWest for substantial monthly returns, and put $6,000 into Granite for a balanced approach between security and earnings. This distribution ensures diversity among different market segments and varying degrees of risk. By doing so, you can capitalize on the consistent cash flow from healthcare assets, the future gains from industrials, and the expansion prospects within the self-storage sector.

If your objective is achieving financial independence, you don’t need to pursue speculative gains or lock away your funds in tangible real estate. A straightforward approach,

diversified

A REIT portfolio may offer you consistent monthly earnings, potential growth over time, and financial tranquility. By investing $20,000 across StorageVault, NorthWest Healthcare, and Granite REIT, you’re making a wise, stable move towards a lifestyle where earning isn’t solely dependent on active labor but rather allowing capital to generate wealth for you.

The post

How to Invest $20,000 in Canadian Property for Financial Independence

appeared first on

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Fool contributor

Amy Legate-Wolfe

does not hold any shares in the stocks discussed. The Motley Fool suggests investing in Granite Real Estate Investment Trust. The Motley Fool has a

disclosure policy

.