Mortgage Investment Corporations (MICs) are a sort of investment fund that allows investors to invest or pool their funds in residential mortgages on behalf of the shareholders. It is one of the most favored investment schemes in the Canadian market providing investors an exposure to the private mortgage industry.
In other words, a mortgage investment corporation is structured similarly to a mutual fund or exchange-traded fund. The only difference is that instead of equities and bonds, the MIC comprises carefully selected mortgages as underlying assets. In MIC, these mortgages produce revenue through interest and fees charged to the borrowers. No matter, how much you are investing, they are quite profitable and fit well in an investor’s fixed-income portfolio.
Some common reasons to consider investing in a MIC include:
1. An Excellent Alternative To Traditional Investments
MICs provide funds to potential borrowers who have been turned down by banks, or credit unions, or refused funding by other private lenders. This often prompts them to apply for private mortgages with higher interest rates, even up to 10% in some situations.
Because of the thriving real estate in Canada, many borrowers have chosen to employ MICs to acquire property funding or address funding gaps with bridging loans. It is sufficient to review other fixed-income assets to understand the appeal of MICs. You can substantially choose to invest any amount with a min. value of $10,000 for a MIC investment in Abbotsford.
2. The Investment Risk Is Significantly Reduced
When you buy shares in a MIC or invest your hard-earned money, you can receive quarterly dividends in the form of interest rates in a varied portfolio of mortgages. This greatly reduced any mortgage risks, thereby making sure you won’t go through any losses.
If you are planning to invest money in an investment scheme with minimum to zero risks, a mortgage investment pool is your foremost choice. You don’t even lose money in the form of fees or tax deductions since they don’t exist at all. The only aspect to consider is that you need to put in more effort in the form of time and money, and can even lose if any borrower defaults on the mortgage. You’ll not necessarily lose any amount if the property value falls in the future.
3. Develop a Sustainable Investment Portfolio
After purchasing shares in the MIC, you only need to sit back, relax, and watch your money grow. No matter, which MIC pool you decide to invest in, all MICs provide investors with regular reports on the progress of their investment and pay out dividends on a predetermined timeline, especially quarterly dividends.
A successful MIC helps an investor build a strong investment profile with high-quality returns at min. rate starting from 7%.
Conclusion
In today’s competitive real estate, investing in the mortgage pool can help you grow your wealth in multiple folds. Not only this, you can boost your portfolio, save on taxes, and earn consistent returns. If you are looking for a real estate investment company in Abbotsford to invest your dollars, Versa Platinum is the name to trust. With 300+ investors investing in our mortgage pool, we have managed to help investors grow their investments as well as portfolios.
