For those clients who hold investments (or want to) in offshore accounts, getting a good return on your investment can be a challenge. Just keeping your principal for many is the goal. Quite frankly for many clients, this is just not good enough.
One way to increase your investment income is through private mortgages. These low risk investments, are a great way to show good returns without taking on too much risk. Something that should appeal to any investor.
What are the Upsides of Investing in Mortgage Funds?
As mentioned, the risk with investing in mortgages is fairly low. Typically these loans are 50% loan to value and less, meaning even under a foreclosure situation the chance of losing any principal is low. These loans are always first charges, and the clients are generally more affluent, as these properties are typically vacation or investment properties for them.
Secondly, the return on these investments are generally over 7%. Much higher than your typical mutual fund or GIC, with not much more risk attached. A safe investment with a smart return.
Any Downside?
Sure, every investment has a downside. There could be another market crash which affects property values in the Caribbean much more than in North America. Homes can go into foreclosure at times and it may take some time to get your principal and interest back, depending on the foreclosure laws in that country. With the higher returns, comes a higher risk, very typical of any investment.
How do You Invest in Offshore Mortgages?
There are a number of ways to do this, as well as a number of companies who offer it. Let’s look at just a few:
- Mortgage funds – These companies are located throughout the Caribbean, it simply takes some due diligence to find them. Typically they will pool their clients money to decrease the risk on individual borrowers. The returns can be a bit lower due to higher management fees, but overall a fairly safe way to invest.
- Lawyers – Lawyers will often lend their clients money out for them on the right deals. This requires that either the lawyer has some lending experience or the investor themselves. Generally in these types of situations, the investor takes on the full mortgage themselves, without spreading out the risk.
- Carib Capital Ltd – We can also assist clients in lending out their investment dollars. Similar to the lawyer situation above, we would facilitate the transaction and the investor would carry the entire mortgage on their own. We get numerous inquiries every month from good quality clients, looking for low risk loans and we are happy to match them up with our investor partners.
Talk to us today about investing in offshore mortgages. We will gladly work with you to find the right fit for your investment dollars.
