Why choose the New Nordic rental guarantee concept?

Mar 1, 2017 | Emerging Trends

There are several different property funds and rental guarantee concepts that are available on the market at the present time so choosing the one that that is right for you can be something of a minefield. Many investors are confident that property should form part of their portfolio but deciding whether to invest in a property of their own or whether to invest in a property fund such as those connected to student accommodation provides another challenge.

If we take student accommodation funds for example, these have experienced a somewhat rocky ride over the last five or six years with many often being suspended from trading for significant periods of time. The problem with investing in a fund is that you only own ‘units’ in that fund and you have nothing tangible that you can see or touch – just a piece of paper that in effect is a share certificate.

Physical property has the huge advantage of being tangible and, assuming that you purchased it freehold, is something that you will own forever. A physical property is likely to appreciate in value over time whilst at the same time giving you the opportunity to generate a passive income by renting out the property. Of course, this isn’t without its potential pitfalls and you certainly need to do your research, but if you have done this, there are returns to be made in the region of 8-10% p.a.

Why choose the New Nordic rental guarantee concept?
Why choose the New Nordic rental guarantee concept?

 

The main problem associated with owning a property with the view to generating an income from rental returns is often the tenants. Finding tenants can be tricky enough, but finding tenants who will stay long term, pay the rent on time and look after your property is even harder. The is where the rental guarantee concept comes into its own. Basically, you will be paid a return on x% p.a. for a period of y years. This gives you a very definitive figure upon which you can base your investment decision.

The trouble is, some of these rental guarantee concepts are not quite what they seem and are run by inexperienced management teams and developers who lack cashflow. Worryingly, these schemes are often launched to plug gaps in an already struggling project and are destined to fail from the outset. Refreshingly, there is a scheme in Pattaya, Thailand that is a beacon of success and has been well managed and run by the developer for the last ten years and the company has successfully completed literally dozens of properties over that period.

The company is called the New Nordic Group and their rental guarantee concept offers investors a return of 10% p.a. over periods of between five and twenty years. They manage the property of your behalf, taking away the headache of finding tenants as you rent your unit directly back to the group. It is New Nordic who pay you on monthly basis so it is irrelevant from your point of view if your unit is occupied or not – you get your rent!

The New Nordic Group have well-established links and contracts with tour operators who are based both in Thailand and overseas. It is these tour operators who, for the most part at least, guarantee bookings for several weeks, months and even years in advance. As mentioned, the group have completed dozens of properties therefore cashflow is not an issue and have excellent infrastructure in place such as restaurants, bars, shops and even a doctor in place to make their properties attractive to guests.

The New Nordic Group have well-established links and contracts with tour operators who are based both in Thailand and overseas. It is these tour operators who, for the most part at least, guarantee bookings for several weeks, months and even years in advance. As mentioned, the group have completed dozens of properties therefore cashflow is not an issue and have excellent infrastructure in place such as restaurants, bars, shops and even a doctor in place to make their properties attractive to guests.

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