MICs vs. REITs: What’s the Difference?
In the world of alternative investing, two vehicles often come up in conversation: Mortgage Investment Corporations (MICs) and Real Estate Investment Trusts (REITs). While both offer exposure to the real estate market and the potential for regular income, they operate in fundamentally different ways—and serve different investor needs.
At Advanced MIC, we often hear the question: “How is a MIC different from a REIT?” The answer lies in what each vehicle invests in, how income is generated, and the type of exposure investors receive.
Advanced MIC offers an alternative investment option that helps mitigate risk through minimal correlation to public markets, delivering genuine diversification to your portfolio. Reach out to us today to explore if Advanced MIC is the right fit for your investment goals.
MICs: Lending-Focused, Interest-Generating
A Mortgage Investment Corporation (MIC) is a Canadian investment structure designed to pool investor capital and lend it out as mortgages—usually to borrowers who don’t meet the strict criteria of traditional lenders. These may include self-employed individuals, newcomers to Canada, small business owners, or developers seeking construction financing.
Key features of MICs:
- Invest in mortgage loans, not properties
- Generate income through interest, fees, and penalties
- Offer monthly or quarterly dividends to investors
- Provide flow-through tax treatment under Section 130.1 of the Income Tax Act
- Allow investment through RRSPs, TFSAs, RRIFs, and other registered accounts
MICs are professionally managed, diversified across multiple loans, and structured to deliver consistent income with a focus on capital preservation.
REITs: Property Ownership and Rental Income
A Real Estate Investment Trust (REIT) is an entity that owns and operates income-producing real estate. This may include residential apartments, commercial office buildings, industrial parks, retail shopping centers, or mixed-use developments.
Key features of REITs:
- Invest in physical real estate assets
- Generate income from rents, lease agreements, and property sales
- Provide exposure to real estate appreciation and depreciation
- Also eligible for registered accounts like RRSPs and TFSAs
- May be publicly traded or privately held
REITs tend to be more equity-like, with income tied to the occupancy, maintenance, and market value of the underlying properties.
MICs vs. REITs: A Side-by-Side Comparison
Think of a MIC as a REIT for Lenders
If REITs are about owning the property and profiting from its value and rent, MICs are about lending against the property and earning from the interest charged. That’s why many refer to MICs as the “REIT equivalent for lenders.”
MICs offer a way to participate in real estate without being affected by vacancy risk, property maintenance issues, or changing real estate valuations. Instead, investors benefit from interest payments and short-term lending cycles, which can provide greater consistency in returns.
Which One is Right for You?
The right investment vehicle depends on your goals:
- If you’re seeking regular income, lower volatility, and exposure to real estate-backed loans, a MIC may be the better choice.
- If you’re aiming for long-term growth, are comfortable with real estate market cycles, and want to participate in property value appreciation, a REIT may be more appropriate.
Of course, many investors choose to hold both—using REITs for growth and MICs for income—to create a balanced and diversified alternative investment portfolio.
Why Investors Choose Advanced MIC
At Advanced MIC, we offer investors access to a carefully managed portfolio of mortgage investments with a focus on:
- Minimizing risk through a diversified mortgage portfolio
- Consistent, reliable income streams
- Clear, timely updates on portfolio performance and financial results
- Eligibility for registered plans
As the demand for private mortgage solutions grows across Canada—particularly in underserved markets like construction, self-employed borrowers, and non-bank lending—MICs like ours are playing an increasingly important role.
Interested in learning more?
Contact us today to explore how Advanced MIC can support your income goals through a diversified mortgage investment strategy.
Contact a Dealing Representative today to learn how you can start investing with confidence and achieve consistent returns.
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This document does not constitute an offering of securities. The securities are offered exclusively through an Offering Memorandum provided by Advanced Capital Corporation, a registered dealer, in compliance with applicable securities laws. The information contained in this summary is incomplete and is provided for informational purposes only. The financial returns discussed herein are target projections and may not accurately predict future performance. Investors are encouraged to review the full Offering Memorandum and consult with a financial advisor before making any investment decisions.
