Investing Alternatives to RRSPs, TESP, and TFSA in the GTA
Investing Options for RRSP, TESP, and TFSA
With interest rates near zero, most investors aren’t really seeing a lot of growth with their savings. If you’re not happy with the returns you’re getting with your Registered Retirement Savings Plan (RRSP), you can use your self-directed plans to invest in private mortgages backed by Canadian real estate.
A mortgage investment corporation (MIC) is an investment company that enables the average Canadian to invest in a pool of private residential and other mortgages. By law, a MIC must pay 100% of its annual net income to shareholder as dividends, which are then taxed as interest income.
MICs often lend to underserved sectors of the mortgage market—those typically underrepresented by traditional financial institutions, such as those who have bruised credit or are self-employed. But the rewards are attractive to those looking for a fixed income investment.
They’re especially attractive to those looking to invest in private mortgage lenders in the Greater Toronto Area (GTA). According to the Toronto Real Estate Board, in 2015, Toronto real estate reached record levels with sales up 9.2% and prices up 9.8%.
Thanks to the region’s economy, jobs market, and near-record low interest rates, the demand for housing remains strong. As a result, private real estate mortgages in the GTA will continue to be an excellent investment strategy.
Invest your RRSP, TFSA, RESP into Private Mortgages with MCC
Mortgage Company of Canada (MCC) is a privately owned company with more than 75 years of industry experience and offers investors the opportunity to invest in an alternative investment class of a diversified, secure portfolio, and professionally managed Canadian real estate mortgages.
MCC has developed a diversified portfolio of over 300 residential mortgages with a mix of investment types across the GTA. As an alternative investing strategy, the MCC MIC has been generating consistently positive returns and has never missed a dividend payment.
Accredited investors can subscribe to common shares of the MCC at a minimum investment value of CDN$25,000. Shares may be purchased directly or through a registered plan such as an RRSP, RRIF, TFSA, RESP or RDSP, or through any combination thereof.
What are the benefits to using your RRSP to invest in a MIC?
The investment is secured in a hard asset: real estate. Over the long run, you’re using your RRSP, which is currently giving you little to no fixed income, for a defined interest rate that is backed by one of the strongest real estate markets in the country.
Investing in a MIC is considered a qualified investment and can be held in a number of registered savings plans, including RRSP, RRIF, TFSA, RESP, RDSP, and deferred profit-sharing plans.
Investing in a MIC also provides you with regular income while staying tax-sheltered. You can choose to take the annual dividend as a payment back into your self-directed plan or re-invest that dividend for additional shares in the company.
What are the benefits of investing in MCC?
Our management team has been in the mortgage lending, brokering, and real estate development business collectively for over 40 years. We also focus our lending in residential communities in the Greater Toronto Area, where demand exceeds supply.
On top of that, we lend at a discount to appraised value determined by a third-party, best-in-class appraisal firm. We also mitigate its risk by limiting the Loan-to-Value (LTV) ratio to 80% or less and diversifying its portfolio with a high volume of small value loans.
To find out how you can diversify your investment portfolio with Canadian real estate, contact Mortgage Company of Canada by phone at 905-886-5352 or 866-318-7222 or by email at firstname.lastname@example.org.