Do low risk investments offer 10% returns exist?
The natural assumption about investments is that low risk investments only pay low returns and as a general rule this is probably correct. Perhaps pre-2008 there were lots of relatively low risk, or so they were deemed at the time, investments paying well in excess of 10% but sadly as the world’s major economies collapsed, so too did these types of investment with billions of dollars wiped out almost overnight.
So, what investments do pay a higher rate of return and are they really low risk? Investments that need to be tied up for longer periods tend to be the ones paying the higher returns – and quite rightly so. The investor sacrifices liquidity and the security that this offers in return for a higher rate of return. This doesn’t mean that the investment itself is riskier, just that the individuals personal circumstances and the fact that they may need this money for something else does necessitate paying a higher return.
Longer-term investments are investments in things such as property, often investments that involve larger capital outlay that cannot easily be sold overnight. In order to encourage people to purchase investment properties the returns must be higher than those offered by alternative vehicles so therefore returns of anything between five and ten percent per annum are perfectly reasonable.
Often the risk involved with investment properties is more about the property and the tenants rather than the economic environment. Location is obviously a massive factor when it comes to purchasing a property. The property needs to be purchased in a desirable location at a price that means a profit can reasonably be achieved. The next big problem is the tenants. Firstly, you need to ensure that the property is occupied for the majority of the year and secondly, you need to find ‘suitable’ tenants – ones that pay rent on time and look after your property.
Imagine then if these risk factors were to be removed. You purchased a property in a desirable location, someone managed the property on your behalf, found tenants and regardless of if your property was occupied paid you a guaranteed return of 10% p.a. On top of this return it would be guaranteed for periods of anything from five to twenty years. Surely this is a low risk investment that DOES pay 10% p.a.?
This is the exact offer that is available from the New Nordic Group who have been offering this deal for nearly a decade in Pattaya in Thailand. The scheme has been so successful that many of the investors are repeat clients looking to maximise their earning potential. The experienced management team and sound business plan mean that only low levels of occupancy are required in the low season to meet all obligations. The scheme has paid out on time, in full on every single occasion.
The group have well-established ties with local and international tour operators meaning that bookings are guaranteed months in advance. They own dozens of already completed properties in the area, have their own construction teams and continue to manage the properties themselves therefore ensuring continuity as well as being able to solve any issues quickly.
The benefits are there for both developer and investor and the longevity of the scheme and the future plans certainly mean that the New Nordic projects have a very bright future. So, to answer the question, yes, low risk investments offering 10% returns DO exist.
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