Every shrewd investor is evaluating what options are open to them these days and caution are playing an increasingly important role in many of those decisions. Stocks, shares not to mention Bitcoin are at all-time highs, but there still seems to be uncertainty from individuals and a feeling that the markets could crash at any time. If this is right or wrong only time will tell, but it is somewhat understandable that many private investors are choosing gold and property as their investments of choice.
Both of these options do carry an element of risk
History suggests that as long-term investments their value increases over time, accepting some of the peaks and troughs that can occur with any investment. Gold needs no explanation as we are all aware of its pros and cons, but the property is a great deal more complicated.
There are so many options available such as buying property to renovate, buying property funds, buying independently to (or “intending to”) generating rental income or joining a rental guarantee concept. All options need to be explored, and often personal circumstances will be the deciding factor.
If we just look at the two rental income options for the purpose of this article, buying and renting a property independently can give investors greater flexibility, greater independence and in some cases greater control. However, they also come without guarantees regarding rental income and potentially numerous headaches when it comes to tenants. Finding tenants is by no means easy and finding quality ones is even harder. You could, of course, employ the services of management company but this costs money and will eat into your return – plus there are no guarantees of finding tenants.
Rental guarantee concepts, on the other hand, give investors a level of certainty.
The investor will know what annual return they can expect and for how long they will receive it. The vast majority of schemes involve the management of the property, so the investor doesn’t need to worry about finding tenants thus taking away one headache. This is the ideal form of a passive income as little to nothing is required concerning input from the investor once they have paid for the property until the scheme has run its duration.
The downside with these schemes is that you are mostly reliant on the developer. If they run into financial difficulties, your payments may fail to materialise although but at least you will have the deeds for the property. You may also lack control and independence although as this is a long-term investment, it shouldn’t be too significant. Choosing a quality developer will eliminate these issues, so your need to carry out careful research.
An example of a successful rental guarantee concept is offered by the New Nordic Group who are based in Pattaya, Thailand. Their concept pays investors 10% p.a. for periods of between five and twenty years depending on which Pattaya property you purchase. This is a tried and trusted business model that has been hugely successful for the last decade and is supported by an experienced management team. Most of the tenants come from domestic and international tour operators who can guarantee bookings months in advance. New Nordic are financially secure therefore there are no issues regarding payment.
After you have weighed up all the pros and cons of owning properties independently in Pattaya or joining a rental guarantee concept, you would have to say that a scheme such as that offered by the New Nordic Group is by far and away the best option.
Content provided by: Emerging Trends Adivisors