Rental Guarantee concepts, are they safe or are they something that I should avoid at all costs?
It seems almost natural these days that we question all investments, after all, we were all affected or know someone who was hit by the economic crisis of 2008. Of course, a certain degree of caution is always wise, and anything that sounds too good to be true probably is, but that doesn’t mean that we should just dismiss everything out of hand. So, rental guarantee concepts, are they safe or are they something that should avoid at all costs?
Like most things, when it comes to rental guarantee ideas you will find good and bad, but the idea behind them is sound so long as no party get greedy. As most of these concepts are available from developers, it is important that they remember their need for investors, but likewise, investors need to keep in mind that the developers need to generate a return as well for managing and operating the scheme. Assuming that both parties work together, there is no reason why it can’t be roaring success.
What do investors need to consider before joining a Pattaya rental guarantee concept?
One of the key factors with successful schemes is experience and longevity. Schemes that have been in operation for five or more years have probably ironed out any problems. They will also have the infrastructure including management teams to ensure that everything runs smoothly and there are firm foundations in place for this to continue to be the case. Obviously, another major consideration is the financial position of the developer. How do they financially appear and do they have sufficient cash flow? If the developer has longevity and a healthy financial situation everything is looking positive.
Of course, it is not just the Pattaya developer who will determine the success of the investment. The location will play a massive role in determining if this particular rental guarantee concept holds water. Many of these types of investment are in tourist areas, so you need to establish whether the resort has a long-term future or if it is just somewhere that it fashionable at present. Also, do visitors come from just one country or variety? If it is from just one location, this increases the risk so think about this when making your decision.
The New Nordic Group offers one example of a great rental guarantee concept in Pattaya, Thailand. The group have completed dozens of hotel serviced style condominiums over the last decade offering the same deal of returns of 10% p.a. over periods of five to twenty years. They build the property, sell it to investors – hence they get their desired return, rent the unit back from the investors and then sub-let the units out to generate profit for themselves and 10% p.a. Investment returns for the investors.
The business model is now so finely tuned after ten years that occupancy rates, even in the low season, are kept to the absolute minimum required to satisfy all liabilities. It is a perfect concept and one that is tried and tested and thanks to the company’s cash flow, infrastructure and reputation and one that has numerous fail safes.
Several local developers have sought to emulate the scheme, but to date, none have the same resources in place to give investors the same level of confidence that they gain from the New Nordic programme. This Investment offers excellent returns and is a relatively small risk. When you see a scheme like this, you will have an individual feel that rental guarantee concepts are safe investments.