Mortgage Investment Corporations (MICs): Your Gateway to Private Lending

For most investors, becoming a direct mortgage lender to a borrower is not feasible. It requires a lot of capital to match the mortgage request, knowledge on how to evaluate, legal expertise, and the willingness to handle a single, concentrated risk. That’s where Mortgage Investment Corporations (MICs) come in. A MIC is a fund that makes private mortgage investing accessible to a wide range of Canadians.

Think of a MIC like a mutual fund of mortgages. It pools money from many investors and uses that capital to build a diversified portfolio of private mortgages. By investing in a MIC, you become a shareholder in the corporation, and in return, you receive a portion of the income generated from the interest payments on all the loans in the portfolio.

MICs are appealing for several reasons:

Diversification: Instead of one loan, you are invested in a portfolio of mortgages. This spreads out the risk, so a single borrower's default has a minimal impact on your returns.

Professional Management: The MIC is managed by experienced professionals who handle all the due diligence, loan evaluation, and loan management. You get to earn passive income without the hassle of being a direct lender or a landlord.

Access to Higher Yields: MICs specialize in loans that don't fit the criteria of traditional banks, such as loans to self-employed individuals or people looking to consolidate debt. These loans carry higher interest rates, which translates to a higher potential return for investors.

Eligible for Registered Accounts: MIC shares can be held in registered accounts like RRSPs and TFSAs and more.

If you are interested in investing, we will connect you with a registered exempt market dealer who can walk you through the investment process. Past performance is not intended to provide an indication of future performance.

#RRSP #TFSA #passiveincome #realestate #ontariorealestate #realestateinvesting #alternativeinvestments #mortgageinvestmentcorporation #monthlyincome