2 ASX passive income ideas I'd use to generate $400 a month in 2027

There are many different investments on the ASX that pay dividends, but I have a few favourites that I'd describe as top passive income options.

If I were to try to narrow it down, I'd choose ones that have a good starting dividend yield, reliable payouts and a high chance of long-term dividend growth.

With that in mind, I'd suggest the following two stocks fit the bill if I wanted to unlock significant passive income.

Centuria Industrial REIT (ASX: CIP)

The first business I want to highlight is this real estate investment trust (REIT). It is one of the best ways to get exposure to industrial property on the ASX.

Centuria Industrial REIT's properties are predominantly situated in well-located areas of Australian cities where demand is high due to logistics requirements, e-commerce adoption, data centres, and refrigerated space. This helps the business achieve a high occupancy rate and helps grow rental earnings.

The ASX passive income stock's rental income growth potential is particularly strong, with the REIT suggesting its portfolio is 20% 'under-rented'. This suggests a big jump in rental profit is likely to occur as those contracts come up for renewal over the next few years.

The business pays a distribution to investors every quarter, providing a pleasing level of consistency and supporting cash flow.

In FY26, the business grew its distribution by around 3% to 16.8 cents per security, which currently translates into a distribution yield of 5.6%. I expect a similar payout in FY27.

It looks like a great time to buy, especially given that the ASX passive income stock is currently trading at a 24% discount to its net tangible assets (NTA) of $3.95 as of 31 December 2025.

Future Generation Global Ltd (ASX: FGG)

Future Generation Global is the other idea I want to talk about as an idea for dividends.

It's a listed investment company (LIC) with a difference: it's invested in the funds of more than a dozen fund managers who all work pro bono (for free) to enable Future Generation Global to donate 1% of its net assets each year to youth mental health charities.

Not having management fees or performance fees can significantly improve the net returns of an LIC. Some of the fund managers involved include Antipodes, Vinva, Plato, Langdon and WCM.

Overall, there are more than 3,700 underlying securities in the portfolio with these funds, across different sectors, so there's plenty of diversification.

It has delivered solid investment performance – for example, in the past three years the portfolio has returned an average of 14% per year.

This pleasing investment performance has allowed the business to increase its dividend each year for the last seven years, starting in FY18. It expects to pay an annual dividend per share of 8.4 cents in FY26. That's a grossed-up dividend yield of around 7%, including franking credits.

$400 per month of passive income

Between my two above ideas, they have an average dividend yield of 6.3%, including franking credits.

To generate an average of $400 per month, we're talking about an annual goal of $4,800. With a dividend yield of 6.3%, an investor would need to invest around $76,200 across these businesses.

I'd be very happy to make that investment because of their track records of paying pleasing dividends, though they're not the only ASX stocks I'd buy for passive income.

The post 2 ASX passive income ideas I'd use to generate $400 a month in 2027 appeared first on The Motley Fool Australia.

Motley Fool contributor Tristan Harrison has positions in Future Generation Global. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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