6 Reasons to Invest in a Mortgage Investment Corporation

6 Reasons to Invest in a Mortgage Investment Corporation

- in Mortgages, New Alternatives


Mortgage Investment Corporations (MIC) are investment vehicles that focus primarily on mortgages. Thousands of investors pool their money together. The MIC starts lending out the funds to qualified borrowers. MIC`s are professionally managed by a management team that is compensated with management fees and in some cases a performance fee.

1.     Easy to understand

Simplicity is one of the most popular characteristics of the MIC model. MICs are an easy investment to understand as most investors are familiar with the concept of a mortgage. They provide quarterly investment statements and annual financial statement to keep investors well informed.

2.     Generate Monthly Passive Income

MICs must distribute their earnings to shareholders to avoid taxation at the entity level. MIC dividends are treated as interest income in the hands of the shareholder. Most MIC`s will payout the dividend on a monthly basis. You can choose to receive the dividend in cash or re-invest to purchase additional shares.

3.     Secured by Real Estate

A typical mortgage portfolio will consist mainly of commercial, residential and construction financing as well as land development loans SECURED by first or second mortgages, and in exceptional cases, by third mortgages. Total mortgage amount will normally not exceed 85% of the most recent valuation of the property – depending on the investment mandate and objectives of the particular MIC.

4.     Flexibility

The Preferred Shares are retractable, meaning that investors have the right to require the Corporation to redeem upon appropriate advance notice and subject to redemption fee schedule.

5.     Accountability

MICs must meet a set of requirements pursuant to section 130.1 of the Income Tax Act. One of the requirements is at every fiscal year audit of a MIC’s annual financial statement must be made by an independent accounting firm.

6.     Yield

A MIC can help you achieve your retirement and financial goals through a consistent yield. Most MIC’s consistently return approx. 8% yield to investors.


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