Are rental guarantee concepts the perfect passive income?
We are always looking for new ways that we can earn more money. You don’t have to search very far on the internet to find various promises of ways that you can make money from your armchair. Equally, you don’t have to do much research to find out that most of these schemes are scams and the chances of you losing money are far greater than your chances of making it – hardly what you planned!
There are of course legitimate ways that you can earn a passive income but they involve investing reasonable amounts of capital and although there are risks involved, these risks are considerably lower than any ‘get rich quick’ scheme. The best known and most successful ways to earn a passive are owning stocks and shares where you receive an income in the form of a dividend or through investment properties where you earn a rental income.
Of course, shares can be a risky business these days especially with global stock markets at all-time highs so your chances of buying high and selling low are increased. Nothing is 100% secure when it comes to stocks and shares but it is possible to spread your risk through the purchase of mutual funds as opposed to shares in a single company. The dividend you earn will be determined by the company at the end of their financial year or at their AGM – but remember they are under no obligations to pay a dividend.
When it comes to investment properties you have more control over your earnings, assuming that you own the property outright. Location is massive factor in determining how successful you will be but obviously desirable locations are more expensive. Then you have the problem of finding tenants, a major headache for lots of landlords. If you do find tenants, are they quality tenants, do they pay the rent on time, look after your property and stay long-term? This can naturally cause sleepless nights and why many landlords use management companies although this comes at a cost.
The headaches caused by tenants is one of the reasons why in recent years we have seen an increase in the number of rental guarantee concepts that are springing up globally. These are usually schemes whereby developers construct properties that are design specifically for investment purposes.
The investor purchases the property from the developer and then immediately ‘rents’ it back to the developer for a given return for given period. The developer then manages the property, finding tenants, making payments and so on and so forth. This gives the investor the security of knowing what return they will receive for doing next to nothing therefore making it an excellent form of passive income.
An example of one such scheme would be the rental guarantee concept that is offered by the New Nordic Group in Pattaya, Thailand. Their particular scheme pays investors 10% p.a. for periods of between five and twenty years depending on which property you purchase. This is a tried and trusted business model has been hugely successful for the last decade and is supported by an experienced management team. Bookings are guaranteed months in advance via domestic and international tour operators meaning that the scheme is financially sound and relatively low risk.
If you are looking to earn a passive income, then the New Nordic rental guarantee concept is probably the perfect investment for you. This is a stress-free investment that generates superb annual returns for minimal risk.