All investors dream of establishing a passive income stream, but there are no shortcuts to building that income stream. It requires the right investments, plenty of patience, and above all, time. Fortunately, there’s a super dividend stock to consider buying now that can make that process easier.

Establishing a passive-income stream — the traditional way

One of the tried-and-tested ways of establishing a passive-income stream is by establishing a rental property income stream. This requires a lot of initial capital for both a downpayment and renovations. Beyond that, there are tenant issues, property taxes, and the mortgage itself to worry about.

Often those concerns were offset by the recurring revenue stream generated by the property. The reason I say they were offset is because the overall appeal of that historical model has changed in the last few years.

Specifically, the rapidly rising price of properties, particularly in Canada’s metro areas, has added to an already growing affordability crisis. Throw in rising interest rates, and you have countless would-be landlords who are now priced out of the market entirely or need to up their initial downpayment.

While the average price of homes has dipped a little bit in recent months, it’s still well in the stratosphere in metro markets like Vancouver and Toronto. This means that would-be landlords need a cool $200,000 or more for a traditional downpayment.

Even then, the rent price needed to break even just adds to the affordability problem.

The solution is a super dividend stock

The solution is to forego that traditional rental property model altogether. The alternative option, which is lower risk and removes many of the ongoing issues, is to invest in RioCan Real Estate (TSX:REI.UN).

For those unfamiliar with the company, RioCan is one of the largest real estate investment trusts (REITs) in Canada. The company operates nearly 190 properties across the country. A growing portion of that portfolio is mixed-use residential properties, and that is where an opportunity for those would-be landlords exists.

RioCan’s growing residential footprint comprises of mixed-use properties that are located in high-traffic areas along transit routes. The properties consist of residential towers that sit atop several floors of retail. This makes them appealing options for tenants and investors alike.

Generate a juicy passive income

But perhaps the best reason to consider this super dividend stock is for the insane distribution that RioCan provides investors. As of the time of writing, that works out to a yield of 6.29%, handily making it one of the better-paying options on the market.

For investors looking to establish an income stream, a 3,000-share investment in RioCan will generate a recurring monthly income of $277.

Prospective investors should keep a few things in mind when considering that income stream, particularly when comparing it to owning a rental property.

First, it’s considerably lower risk. Rather than all the risk being allocated to a single property, a RioCan investment is diversified across dozens of properties, encompassing hundreds of rental units.

Second, there are lower initial upfront and ongoing costs compared to a traditional property. As of the time of writing, that 3,000-share initial example noted above costs just shy of $54,000. That’s still considerably lower than the downpayment on a single property. It also comes without a monthly mortgage, property taxes, utilities, and maintenance.

Finally, it’s an investment that can grow on autopilot. Unlike the hands-on approach to owning a property, investors of RioCan who aren’t ready to draw on that income yet can opt to reinvest it. This allows any eventual income to grow further, again, without any of the distractions noted above.

Final thoughts

Every stock, even the most defensive, has some risk, and that applies to RioCan. That being said, the stock offers investors significant long-term potential and a juicy income.

In my opinion, RioCan is the super dividend stock that should be a part of every well-diversified portfolio.