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Real Estate Investment: What You Need To Know

Real estate investment is generally a safer investment option - provided you know what to look for.

Five Things To Consider Before Making A Real Estate Investment

Real estate investment through a mortgage investment corporation (MIC) is a secure, low-risk way to invest and receive steady returns. MICs are also RRSP-eligible investments, used as a source of income and investment for retirement funds. However, before you invest with an MIC, make sure to do some research to ensure that you are making a wise investment.

These are some of the top indicators for MICs you should watch for when making your investments:

Historical Dividends

A trustworthy MIC will provide historical dividend statements for all investors and potential investors. The historical dividend statement shows the amount paid to investors over a specific period of time—for example, a five-year historical dividend. This statement should be clear and easy to read for any investor, and should include the time period, dividends paid each month, and the average dividends paid each year.

Potential investors should look for consistency and predictability throughout the statement. A consistent historical dividends statement shows that the MIC is a stable, low-risk real estate investment with consistent returns for investors.

Professional Experience

Research the MIC’s management and advisory team for qualifications and experience. Look for experience with accounting, law, and real estate. A professional and well-run MIC is safer to invest with.

Investment Redemption (Liquidation) Terms

Look for clear terms on when and how you can redeem (cash out or liquidate) your investment. A reliable MIC will make their redemption terms available and very clear for investors. Make sure to read these terms and consider whether or not the terms are fair before you invest.

Location and Types of Mortgage Investments

MICs should be clear on the locations and types of mortgage investments you are investing in. An MIC that invests in real estate in prime economic locations or for niche markets will be more successful, leading to better returns for investors.

First Mortgage Security

For a safe investment, look for MICs that mostly have mortgages with first mortgage security. First mortgage security makes your investment low-risk and secure, compared to second mortgages that are greater risks.

A trustworthy MIC should be transparent, providing investors with the requested information necessary to make reliable real estate investment decisions. MICs are also great RRSP investments for investors who want to earn stable returns throughout their retirement. Real estate investment is a stable and wise investment choice, especially when potential investors do the proper research on MICs before they invest.