For those that are participating in the UHaul Investors Club coupons are moving higher.
Amerco (NYSE:UHAL), who is the parent of UHaul, has filed a new prospectus that includes issues with coupons that are around 20 basis points higher than those currently offered. It is likely to be a month or so before the new notes become available.
For those not familiar with the UHaul Investors Club it simply is a secured note sold by Amerco. The notes are sold right off of the company website linked above and investors can have IRA or cash accounts. At this time coupons range from 3% to 7.75% with maturities from 2 to 30 years. Investors receive payments quarterly from the company for their notes and the payment includes interest and principal–unlike a typical bond with interest only payments and the balance at maturity.
Disclosure–we currently have $6,000 in our UHaul IRA’s as we became aware of this vehicle from kaptain lou earlier this year so we began to fund our IRA for 2018 in UHaul. So far we have been very pleased with our investment and are happy to see them increase coupons.
Minimum note purchases are $100 so as payments are received one can turn right around and reinvest if so desired.
Like all investments potential investors should do due diligence on Amerco prior to purchasing these notes.
Of course we do not recommend purchases to anyone, but we find it a convenient form or diversifying our holdings.
13 thoughts on “Uhaul Investors Club Increasing Coupons”
Thanks Tim for your hard work. I know that many times you tell us you are “crazy busy” but I marvel that you continue to find enough time to bring us intriguing ideas such as this one. I have contacted the good folks at UHAUL with the question of what tax form do they issue for those who hold these notes in non-IRA accts. The prospectus mentions that all payments are considered “ordinary income” so I assume this means the holder gets a regular 1099-INT or similar form. They have not yet responded, perhaps one of the readers knows the answer.
Hi Artemisa–hope to have more time before long for more work on the site. UHaul is a great idea originally highlighted by kaptain lou.
I would be fairly certain they just do a 1099 for the income–mine is IRA money so at this point I haven’t worried about it.
Yes, and that’s another reason to like the web site: it attracts knowledgeable investors willing to share many of their ideas. Good stuff..
Artemisa, for non-IRA accounts, you will simply get a 1099 from Amerco (UHAL) at the end of the year for your interest earnings. Last year, mine was available on their website and I was able to print it out directly from there. Hope this helps.
how liquid are these? can you sell them?
U-Haul Investors Club® is not for short-term investors
U-Haul Investors Club® members cannot easily sell or trade their U-Notes®, and are required to hold the U-Note® until maturity unless earlier redeemed by us in our sole discretion. Maturities range between 2 to 30 years, please review the terms in our prospectus and prospectus supplementsour prospectus and prospectus supplementscarefully and invest accordingly.
The U-Note® is not FDIC insured
While the money you deposit into your U-Haul Investors Club® account is not insured by anyone, your investment is secured by the asset.
There are risks involved
As with all forms of investments, risk can only be reduced, not eliminated. View our prospectus and prospectus supplements for details on the risks of investing with U-Haul Investors Club®.
No pre-payment penalty
We reserve the right to pay back any U-Note® at any time, with no pre-payment penalties. However, we are under no obligation to do so.
“Full-Recourse Obligation” means that AMERCO® (the issuer) is required to repay you the full amount of principal and interest owed. Your recovery is not limited to the value of the collateral securing your U-Note®, as would be the case in a limited-recourse or non-recourse scenario. The collateral provides you with a security interest and lien on the specified asset(s) you select with your investment, and the full recourse nature of the U-Note® means that AMERCO® is required to repay you in full. View our prospectus and prospectus supplements and all terms and conditions for details on the risks of investing with U-Haul Investors Club®.
No secondary market
Each U-Note® investment must be held until its respective maturity date. There is no secondary market for U-Notes®, and you will not be able to sell the U-Note® back to the company. If you want to sell your U-Note® you will need to find a buyer yourself and pay a transfer and re-title fee. The current fee is $0.00 per transfer (Fee subject to change without prior notice).
Hi xwords59—I think Nomad covered this one with his cut and paste.
No liquidity at all, but the money does come back rather quickly since each payments contains interest and a large chunk of the principal.
In our case we wouldn’t load this option heavily but it is a small piece of a larger diversification effort.
I think I am the only person in the world who is not allowed to invest in this. Still amazed my email account blocks all safety code correspondence. Yahoo obviously cares, but about what I have no idea.
TIm, thanks for the update. I was not aware they were increasing rates, but it certainly make sense. Now that investors can get 3% on a 2 year CD, there would really be no need to invest (and take a little risk) in the 2 year notes that pay the same rate. I look forward to reading the prospectus to see the new rates.
Hi kaptain–we’ll take whatever we can get. This prospectus was more 7 years and out I think–hopefully they will come with 3.2% on the shorter notes.
Tim, you are correct after reading through the prospectus. They changed the rates for the 8 to 12 term notes by 20 basis points. However, they left the rates for the 15 to 30 year notes the same. It will be interesting to see what they do with the 2 to 5 year term notes, which are normally collateralized by equipment and not real estate. However, with current CD rates, they will probably be forced to raise those rates.
Thanks for all the work you do for the investors on your website.
You are most welcome kaptain and we all appreciate what you bring to the table.
Lou and Tim, there is a new 30 year 7.75% Uhaul collateral investment that was recently posted:
U-Haul of Ingram Park : Real Estate
5786 NW Loop 410
San Antonio, TX 78238
Wishing you profitable investing, Nomad