The Alternative Investment in Mortgage & Real Estate
You, Also, can act like a bank …
Based on the particular economic conditions and legal systems in individual countries, various means of real estate investment exist for active investors in this sector. The most common paths taken in Canada entail direct property ownership of housing or land, the purchase of rental property, or the pre-purchase of units undergoing construction.
Based on the investment time horizons, risks tolerance, and return on investment (ROI), most investors choose one of the aforementioned approaches. The aforementioned approaches are considered to be traditional approaches in real estate investment.
However, the fact is that other approach exists in Canada for real estate investment which majority of people are not familiar with. This method takes up less time to manage and does not require sophisticated knowledge.
Generally speaking, this method is direct investment in financing the construction loan of the large scale projects developed and managed by major reputable developer in Canada metropolises . The investment is ruled and governed by Canadian Mortgage regulations, meaning it is secured against the subject property. The mortgage and real estate rules in one hand and the rules that govern the registered accounts (RRSP, RESP, TFSA) on the other hand, have caused this type of investment to have unique features. In this article, the alternative investment approach will be analyzed from different angles.
How investment is secured?
In fact this feature is the most important and best feature of this type of investment that makes it unique. Based on these legal mortgage rules, the investor has full face amount of investment registered at the Land Registry office; meaning that there is a direct charge against real-estate. This is basically collateral for the investment registered in investor’s name. In the event that the borrower defaults on the mortgage payment, this law dictates that charges against the land are to be paid off before shareholders and other debts to the borrower.Login to read more