Real estate has always been a potential investment avenue. As alternative investments grow in popularity, more and more investors are looking to the real estate market as a potential investment opportunity source.
Investing in real estate isn’t for everyone. The traditional ways of investing in real estate involved buying rental properties or flipping homes. Mortgage investing through a Mortgage Investment Corporation (MIC) allows investors to capitalize on the real estate market’s potential without owning a property outright. This could be the perfect solution for you.
First, ask yourself our top five questions to ask yourself to determine if mortgage investing is right for you.
1. Are you looking for medium- to long-term growth?
Mortgage investing is not a get rich quick scheme. When you invest in a mortgage pool, you should be focused on long-term gain. Mortgage investing isn’t like timing the stock market right to see a substantial return on your investment in a matter of days or weeks. If you’re interested in growing your capital over time with more stability, mortgage investing is for you.
2. Do you like less volatility from your returns?
This point is related to the earlier point. Whenever you think of investment strategies, you have to consider the risk vs. reward of the investment. We say you should be more focused on medium- or long-term goals because they tend to be less volatile over time. The real estate market may have dips and valleys from time to time, but on the whole, it’s continued to grow long-term.
3. Do you want to be a landlord or flip property for potential profits?
We can’t all afford to buy a few vacant lots, build homes on them, and turn around and sell them for a nice profit. Similarly, we aren’t all cut out for the maintenance and stress of being a landlord. Not only is this a far more hands-on and stressful method of real estate investing, but it also requires more significant risks for rewards and start-up investment capital.
Mortgage investing through an MIC allows you to invest in various properties without taking on the risks personally.
4. Do you want to diversify your investment portfolio?
Do you know why diversification is crucial to success when investing? If not, read our blog article explaining the value of diversification. Mortgage investing through an MIC not only diversifies your overall investment portfolio,but the mortgage pool, too. The pool is further diversified among a variety of properties and projects, adding an extra element of protection.
5. Do you want more flexibility with your investment capital?
When it comes to investing in the real estate market, buying investment property locks you in for a far longer term before you see the benefits of your investment. Investing in private mortgages or through a mortgage investment corporation generally offers a one-year term. These shorter terms allow for greater flexibility. However, as mentioned above, the benefits of mortgage investing are directly related to patience. We recommend leaving your investment in for longer than these short terms to really see the benefits.
If, after answering these questions, you feel that mortgage investing is the right choice for you, the next steps are to:
- Read our blog on What to look for in a Mortgage Investment Corporation, and
- Get in touch with Jordan on our team today.