Should I pay attention to the scare stories?

Feb 3, 2017 | Emerging Trends

We are often hearing scare stories about investment properties that have gone wrong. These are people who have bought properties in Spain, Egypt and other faraway climbs. The victims of these schemes tend to lose large sums of money and suffer lots of heartache and anguish but is it really that common?

The answer is definitely a ‘no’. Yes, these are the horror stories and yes, they can be devastating but the fact is that they are rare. Sometimes the problems occur because of dishonest and unscrupulous developers whilst other times it is due to sheer bad luck and external circumstances. The problem is we hardly ever hear about the tens of thousands of people who buy properties and are absolutely delighted with their investments.

No one wants to be affected in this way and if your carry out sufficient due diligence on the location and the developer, the chances are that everything will be fine. Quality, reputable builders will not mind been asked questions and nor will they mind providing evidence of their claims and proof of their promises. Established developers who have had schemes in place for a number of years, have suitable cash flow and sufficient infrastructure in place are the companies to go for.

After all, our holiday home or investment in the sun is what most of us dream of so make sure you do your homework. As we have touched upon, people choose to buy properties abroad for different reasons. This may be a new home where they intend to reside in or a holiday home where they visit several times a year whilst others choose such properties for investment purposes as the returns are often far greater than those that they could achieve back in their home countries.

In fact, it is these investment properties that we shall concentrate on as the majority of these properties are bought ‘off plan’. One developer in Pattaya, Thailand is an example of developer who has been in business for a number of years selling off plan properties as well as completed projects. Having successfully completed literally dozens of properties over the last decade, by offer the same deal – we will come on to that it in a moment, they would seem like the perfect partner with whom to do business.

This is a well-established developer, they have excellent cashflow, a fantastic business model and superb infrastructure in place. So, we come to the deal that they are offering. They are offering a 10% p.a. rental guarantee on their properties. Not only is this a great return but it is available for periods of 5 to 20 years so gives investors a regular monthly income paid into a bank account in Thailand or overseas. They have always paid out in full and on time so are not surprisingly gaining a lot of interest.

So, if you are looking at buying a rental property overseas, do your due diligence and look at the fine example that the New Nordic Group sets and you will realise that you don’t need to pay attention to all the scare stories.

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