Investors frustrated by low interest rates are increasingly turning to mortgage investments to secure higher income.
Alpha First Mortgage Investments pays an average of 8% returns, with interest paid monthly, and says it's seeing an uptick in the numbers of investors coming through its doors.
Director Olivia Fraser says Alpha First's typical investors are early retirees who have been business or land owners, who travel regularly, have accumulated reasonable wealth and are savvy about investment. "However, they know that the $1 million they might have in the bank is not earning them anywhere near enough income to live on at 3%, and rates aren't about to rise markedly any time soon."
Fraser says her organisation has noticed an increase in the number of investors who have what she calls "frustrated capital".
"The investors we work with are commercially aware but are only getting modest returns from investments such as term investments, and then only getting paid the interest accrued at maturity. Our clients are actually quite discouraged to have worked all their lives to amass a significant cash asset and are then getting meagre returns. With our mortgage investments we give clients a chance to get a much better return, and make a difference to their lifestyle."
Alpha First offers active investments, with investors choosing which high-quality property loans they are happy with. "There are great investments to get involved with out there, in part because the banks have such tight credit these days, so they are not lending to as many property investors and developers as they used to."
Investors at Alpha First can invest any amount upwards of $50,000 and the investment opportunities range from $500,000 to $2 million and have loan terms of 6-24 months. "Our investors receive 8-9% return on their investments, so more than double what term deposits are paying. That provides investors with the security to know their money is working hard for them. It's also a really transparent process with no fees deducted from the investor's monthly interest payments.
"We stringently vet our borrowers and the security offered to ensure that we understand the risk aspects of each loan," she says.
Fraser says land developers, who are trying to meet rising demands for housing, are now flocking to non-bank alternatives for support and there are some very high-quality developments that investors can be matched with. Bank credit has been incredibly tight for the past two years, she says, and the banks are turning away excellent lending opportunities. "This means there are some really sound mortgage investment opportunities now available."
She says land and property is popular security with Kiwis and most investors are keen to help the many good borrowers who are turned away from traditional sources such as banks.
"We think about it as investing for lifestyle - investing that will ensure the lifestyle you've worked hard to achieve," she says.
To find out more, phone Alpha First Mortgage Investments on 0800 555 621 or visit www.alphafirst.co.nz.
Proud sponsors of