Mortgage Investment Corporation in Richmond Hill
More and more Canadian investors are turning to Mortgage Investment Corporations (MICs) to help rejuvenate their investment portfolios. And for good reason. To help boost the economy, the Bank of Canada has kept interest rates artificially low for years. This accomplished two things, it made it cheap to borrow money and took the “income” out of income investing.
Mortgage investors in Toronto looking for higher, reliable yields, are now turning their attention to private MICs. Backed by private real estate mortgages, MICs deliver above average yields, often with annual returns of nine percent or higher and provide investors with a number of special tax breaks.
What Is a Mortgage Investment Corporation?
When it comes to returns and yields, few investments are as advantageous as a MIC. 1 Often referred to as the best investment in the world, MICs invest in real estate-backed mortgages. This is especially advantageous when you consider how strong and resilient the real estate market is in the Greater Toronto Area.
A MIC is a corporation (as defined by the Income Tax Act, Section 130.1) that pools shareholder capital and lends it as mortgages on residential and commercial real estate. The MIC earns income from those mortgages on interest, which are higher than what traditional lenders charge, and general fees.
Because of its corporate structure, MICs do not pay income tax and have to legally distribute all of their earnings to investors.
Investors love MICs because of the yield it provides investors compared to other fixed income investments. You could find a GIC that pays two percent for a one-year term. The returns on government bonds are equally as anemic.
With a MIC, it’s not uncommon to see annual returns of seven percent to nine percent, or higher.
Who Do They Lend To?
MICs lend money to people who may have been turned down by traditional lenders, like banks and credit unions. Because of tighter lending rules and new stress tests, once bankable home buyers are being rejected by big banks. This means MICs are witnessing a large influx of higher quality borrowers. They can be pickier with the types of borrowers they lend to and even charge higher interest rates.
The Benefits of Investing in a MIC
Investing in anything—stocks, bonds, real estate—can be risky. But the more you know, the greater your chances of success.
- Secured by Real Estate: Mortgages purchased by the MIC are secured by Canadian real estate.
- Eligible for Deferred Income Plans: You can hold your MIC in RRSPs, RRIFs, TFSAs, DPSPs, RESPs, LIRAs and RDSPs.
- Excellent Returns: You can earn 6% to 9%+ annually with a MIC
- Experienced Management Teams: MICs are led by seasoned management teams and independent board directors with strong track records.
- Diversified Portfolio: Through MICs, investors own a diversified portfolio of mortgages.
- Steady Cash Flow: Most MICs provide investors with the chance to take regular cash dividends or re-invest it back into the MIC for additional shares.
MCOCI – Mortgage Investment Corporation in Richmond Hill
MICs are becoming more and more popular with Canadian investors looking for secure investments that provide strong yields. Investors looking to invest in a diversified Mortgage Investment Corporation in Richmond Hill with a long history of providing above average returns, should consider Mortgage Company of Canada.
Mortgage Company of Canada is led by an experienced management team with over 45 years of lending experience and an independent board of directors. The vast majority of Mortgage Company of Canada’s portfolio of diversified mortgages are located in the GTA and most of those are made up of first mortgages.
Because of our stellar management team, Mortgage Company of Canada has been able to provide investors with a stellar high yield annual dividend of 9.25%, with distributions paid monthly.
1. This is the opinion of Mortgage Company of Canada.