Investment Property Mortgage in Richmond Hill
Owning real estate is a great way for investors to see their capital grown. Unfortunately, most people aren’t high-net worth individuals that can invest in real estate in Richmond Hill and the Greater Toronto Area. There is a way though for investors to take advantage of Richmond Hill’s red-hot real estate market without needing to own property, and that’s through a Mortgage Investment Corporation or MIC.
What Is an Investment Property Mortgage?
Property values in the Greater Toronto Area have been robust for decades, and thanks to a historically strong economy, real estate will continue to be a sound investment. The problem with owning real estate outright though, outside of needing the upfront money to purchase the property, is that you only realize the increased value when you actually sell the property.
The best way to earn a steady income stream off real estate is through a MIC. With a MIC, you are making an investment in property mortgages in Richmond Hill and the GTA, meaning, you don’t need to even own real estate to enjoy steady cash flow.1
How Does a MIC Work?
MICs are often called the world’s greatest investment opportunity1. And for good reason. A good MIC provides higher returns, is a reliable and stable investment, and is secured by real estate. Because of the way a MIC is structured, mortgage investors can also take advantage of a number of tax breaks.
MICs invest in mortgage loans in Canada’s real estate market; one of the strongest, most trustworthy real estate markets in the world.
As a corporation formed under rules set out in the Income Tax Act, Section 130.1, a MIC pools shareholder money and lends that capital out as mortgages. While some MICs use that capital for both commercial and residential mortgages, the Mortgage Company of Canada only lends money on stable residential mortgages.
MICs earn income from those mortgage funds on interest charges, which are higher than what traditional lenders charge, and general fees. The MIC is legally obligated to pass on 100% of its earnings to investors as monthly dividend payments.
And that dividend is one of the main reasons why investors love MICs so much. Thanks to artificially low interest rates, the yields on GICs and government bonds are hovering around two percent. Mortgage Company of Canada has consistently provided its investors with annual yields of just under 10%.
Investing in Property Mortgages in Richmond Hill
MICs have grown in popularity over the years because of stricter lending rules at Canada’s big banks. Individuals that would have had no trouble securing a mortgage are now being summarily rejected. Higher quality Canadians are now turning to private lenders to secure their mortgages. This means Mortgage Company of Canada can be more selective about who it lends to; it can also charge more in interest.
Investors are drawn to the Mortgage Company of Canada because of its diversified holdings across a large number of different properties and mortgages. The vast majority of Mortgage Company of Canada’s portfolio is located in the Greater Toronto Area and Golden Horseshoe.
Of those, three-quarters are made up of first mortgages. On top of that, 100% of our portfolio matures in less than one year.
Because of Mortgage Company of Canada’s experienced management team, independent board of directors, and diversified portfolio, we have been able to provide our investors with stable, high yield income.
1.This is the opinion of Mortgage Company of Canada.