In a year marked by economic uncertainty and rising interest rates, mortgage investment funds (MIFs) have emerged as a resilient investment option. But what exactly are MIFs, and why should you consider them for your portfolio?
What Are Mortgage Investment Funds?
Mortgage investment funds pool capital from multiple investors to provide loans to borrowers, often those who may not qualify for traditional bank financing. These loans are secured by real estate, offering investors a way to gain exposure to the real estate market without directly purchasing property. For those seeking consistent returns and diversification, MIFs present an attractive option.
Dez Capital: A Trusted Canadian Mortgage Lender
Dez Capital, a Canadian non-bank mortgage lender, specializes in residential, construction, development, and commercial loans within the Golden Horseshoe Area. Despite the challenges of 2023, including a 5% interest rate and a slowdown in the real estate market, Dez Capital posted higher returns than in previous years. With $593 million funded to date and a 9.50% annualized reinvestment return for Q2 2024, Dez Capital continues to deliver stable returns through its selective investment approach.
A Year of Strategic Adjustments
In response to the Bank of Canada’s rate hikes, Dez Capital adjusted its portfolio to align with new interest rates, implementing a lower loan-to-value (LTV) lending strategy and aiming to have 50% of its portfolio in first-position mortgages. This prudent approach allowed Dez Capital to navigate the market’s challenges, including an increase in mortgage defaults, which the company addressed individually, with legal action as a last resort.
Why Invest with Dez Capital?
- Stable returns: Even in a volatile market, Dez Capital’s careful portfolio management ensured higher returns for 2023, positioning the company for continued success in 2024.
- Diversification: By investing in a pooled mortgage fund, your capital is spread across multiple loans, reducing risk and enhancing portfolio stability.
- Access to real estate: MIFs offer an indirect way to invest in real estate, making it easier to gain exposure to this asset class without the complexities of property ownership.
Looking Forward
As the Bank of Canada navigates the delicate balance between taming inflation and avoiding a recession, the outlook for mortgage investment funds remains cautiously optimistic. Economists anticipate rate cuts by mid-2024, which could reignite activity in the residential and condominium markets, halting the downward trend in sales and prices.
Conclusion
Mortgage investment funds offer a compelling way to diversify your portfolio and achieve stable, consistent returns. With Dez Capital, a leader in Canadian real estate financing, you can invest with confidence, knowing that your capital is in expert hands. Explore the potential of mortgage funds with Dez Capital and take the next step in your investment journey.
