The number of rental guarantee ideas
that are now available is increasing almost on a monthly basis, but where has this idea came from? The idea behind rental guarantee concepts is not particularly new as it is people getting together collectively to buy property in Pattaya to generate a return – it is just that it is now done on a more commercial scale these days and more often than not developers themselves offer these schemes.
Rental guarantee concepts, if operated correctly, are excellent investments that give investors some level of stability in an otherwise volatile economic environment. They are also useful for developers – hence why their numbers have increased in recent times. They offer a very attractive incentive to the investor which means that the property is sold quicker and then generate an additional return in the form of the rent generated, a win, win situation.
So, if these schemes are so great, why is only now that developers have jumped on the bandwagon. Well, the answer to that is quite simple, circumstances have changed since the global economic crash of 2008 and demand for rental properties is now higher than in has been for generations. Naturally, wherever there is demand, there is a need for supply which almost always means an opportunity to generate very healthy returns.
The problem is that like with many excellent ideas in business it is copied by those who are perhaps unable to run such as scheme efficiently. They may lack cash flow, experience or have entered the market trying to gain a quick return without having a suitable business plan to be able to operate such a concept. If this happens, it can spell disaster for both the developer and the investor. It is, therefore, vital that you conduct your due diligence before entering into such a scheme.
Many of these rental guarantee concepts are established to in tourist destinations as their market is holiday lets. Investing abroad is something that has again increased in popularity in the last ten to twenty years, so this again is another reason why these types of concepts have only recently taken off. Investors are still understandably cautious about investing abroad but assuming that the country is both economically and politically stable and there are no restrictions on foreigners purchasing property, the risks are no greater than buying at ‘home’.
An example of a well-established rental guarantee concept that has been operating for a long time is the offer by the New Nordic Group in Pattaya, Thailand. This superbly managed scheme has produced dozens of completed properties and hundreds of euphoric investors. In fact, many investors are so satisfied that they continue to purchase more units that are constructed by the developer. The developer has made excellent returns themselves and has ensured that the infrastructure is in place for future growth including contracts with local and international tour operators.
The scheme offered by the New Nordic Group
offers involves purchasing a property from the developer who then guarantees you a 10% p.a. Rental income in the form of rent. This is paid by the New Nordic Group themselves as you effectively rent your unit or units back to them who in turn sublet it out to tourist groups. The rent is paid monthly regardless of if your unit is rented or not direct into the bank account of your choice. This deal is available for periods of between five and twenty years which just adds to its appeal.
If you are searching for an excellent rental guaranteed concept, there will be few better around the world than the one offered by New Nordic.