MICs, or Mortgage Investment Corporations, are an increasingly popular investment option for diversifying a portfolio. MICs provide investors with a way to invest in the real estate industry without actually owning physical property. Instead, investors pool their money together, and the MIC uses that money to fund mortgages for borrowers. As a leading provider of mortgage investment solutions, PHL Financial Group understands the importance of making informed investment decisions. That is why we want to help you make an informed decision about whether or not MICs are a good investment.
Learn more about the difference between a REIT and a MIC.
There are numerous benefits associated with investing in MICs, including:
Since investors’ money is pooled together and invested across multiple properties, their portfolios are diversified across different real estate types and borrowers. By owning a portfolio of mortgages, investors can mitigate risk and avoid putting all their eggs in one basket. MICs specialize in mortgages. They are required to keep at least 50% of their assets invested in residential mortgages as part of their portfolio, but some do more commercial or larger loans than others. This diversification helps mitigate potential risks associated with individual properties and can help ensure investors receive consistent returns.
Investing in MICs provides the potential for regular passive income. These companies typically generate consistent returns through regular interest payments on their mortgage investments. This means that investors can enjoy a steady stream of cash flow without having to actively manage their investment portfolio or worry about market fluctuations. Moreover, as long as borrowers pay their mortgage on time, income from MIC investments will remain stable. At the same time, when a borrower ceases making payments on time, investors can rely on the experienced team at the MIC to handle that situation and see the loan through the exit process, whatever that looks like.
MICs typically provide higher yields than traditional fixed-income investments like bonds or GICs. The return on a MIC investment will vary depending on the specific corporation and market conditions. Properly managed MICs can also provide stability and capital preservation. Unlike other types of investments that may be subject to market fluctuations or economic uncertainty, MIC loans are secured by the real asset behind the loan, which can provide a level of comfort, when the portfolio is managed correctly by the team at the MIC.
If you want to learn about our investment solutions, contact PHL Financial Group today. Contact our proficient advisors by dialing 604-579-0844 or by filling out our online contact form. Our team will be happy to address all your queries and assist you in making well-informed investment choices.