Whether you are looking to diversify your portfolio, build generational wealth, or supplement your retirement with passive income, real estate should be an essential part of your investment strategy.

Investing in real estate has traditionally been a reliable path to wealth-building. Not only is it an ideal source of passive income and capital appreciation, but investors have benefitted from the security of their positions being backed by real, tangible property.

However, these rewards are frequently offset by the challenges of owning one or many investment properties. There is always a significant investment of time and energy needed to maintain the property or properties, or to search for and select qualified tenants, for example. With inflation currently at historic highs, purchasing a property can take up large portions of your capital. Using investment funds as leverage to finance the purchase is also not ideal in the current high interest rate environment. Other expenses, such as taxes and insurance, as well as inevitable vacancies, could make this strategy even less appealing.

Being a passive real estate investor is nonetheless possible by becoming a private lender. This is a legitimate strategy that can realistically contribute to your investment portfolio. Some benefits to becoming a private mortgage lender include:

• Seeing a continual demand for this type of financing, particularly from the residential real estate sector.
• Receiving higher returns compared to retail products such as mutual funds. Among many reasons for this is that lenders derive their income from the interest payments that borrowers make to them.
• Mortgage lending is a less volatile and more predictable investment than other retail products like individual stocks. Mortgages are backed by real and tangible property, rather than on the guesswork of corporate profit predictions.
• There is consistent income, unlike products like ETF’s that rely only on appreciation and pay nothing to their investors

This being said, it is important to note that your investment as a private lender needs to be protected. Which is where investing with a Mortgage Investment Company (MIC) comes in.

A Mortgage Investment Company works to place your capital into a pool of mortgages, essentially decreasing the risk of loss due to non-payment as your funds are spread among various mortgages. The advantages to working with a MIC are many, but of note is the knowledge that your funds are being deployed strategically by experienced professionals who are well-versed in selecting high-quality borrowers. Their expertise in mortgage underwriting, due diligence processes, debt servicing and compliance ensures that your investment grows consistently and reliably.

Like any other strategy, investing in mortgage lending must be considered carefully. Do your research. There are several Mortgage Investment Corporations that cater to different types of investors based on their goals, needs and levels of risk tolerance. Assess whether your financial situation qualifies you to invest with a Mortgage Investment Corporation. There are requirements that help determine if this is a suitable investment vehicle for you. Reaching out to a Mortgage Investment Corporation to see if this investment option is suitable for you should be your first consideration.

Real estate investing, especially in today’s economy, is a proven wealth-building strategy for many investors. However, owning real property is not feasible for everyone, be it due to constraints on time, energy, knowledge, or funds.

Investing through Mortgage Investment Corporation (or MIC) can be an efficient way for investors to put their capital to work in the real estate sector and enhance their portfolios.

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