Guarantee of revenue
Guaranteed rental yield

In response to the recent economic crisis that, for example, in the UK has led to a substantial reduction in the financing of new development projects by banks, a new investment opportunity has emerged for individual investors, namely the purchase of a guaranteed rental property and, in some cases, a repurchase .

 

Developer builds a residential or lifestyle property within this model and sells individual apartment units to private investors. Experienced and professional operator, in some cases the developer himself, then takes over for a predetermined period of 5 to 25 years into lease and administration. The professional operator then deals with the owners of the property related to the ownership, rental, management and maintenance of the property.

Guaranteed rental yields thus achieved reach normal market values for the location and category of accommodation capacity. Percentage rental yields typically reach stable and lower levels in developed markets, while emerging markets tend to be more volatile, but at the same time reach higher percentages.

Realized revenues

The highest rental yields are so-called "holiday properties" represented by ski apartments and lifestyle seaside apartments. Residential real estate in European coastal destinations reaches gross revenues of 5% - 8%. However, a higher income tax on commercial rentals and increased sensitivity to the economic cycle is to be expected, as most visitors are Europeans, unless of course you choose a premium site published in the Lonely Planet global guides.

On the other hand, exotic destinations with a year-round season reach a gross rental yield of 6% to 15%; moreover, the significant advantage of these locations is low income taxes and lower volatility of rental income over the economic cycle. These are mostly globally known areas, attracting tourists from all over the world, where the risk of fluctuating demand will in the future eliminate the growing proportion of China's more affluent citizens in the global middle class that primarily generates tourism demand.

When you invest in Asia, for example in Thailand, you are accepting an acceptable risk because it is a world-famous destination that benefits from rising demand from the Chinese middle class.

Buy back guarantee

In the case of buy back, this is a guarantee of real estate repurchase or real estate investment by the developer under predetermined conditions within a predefined future date of 5 or 10 years.

In practice, we have two types of buy back, namely the Call Option Agreement and the Put Option Agreement. In the first case, it is the seller's ability to buy a property at a predetermined price, but the developer is not obliged to redeem the property. In the latter case, it is the investor's ability to obtain a repurchase repurchase from the seller, but it is highly dependent on whether the developer has funds to repurchase the financial reserve, or whether he has a new entrant available for that unit.

We do not recommend investing exclusively on the buyer's redemption guarantee. We take this contractual obligation as a certain benefit of the investment and, at the same time, we also calculate the variant of the future exit from the investment through a reputable local agent.