Safe investments offering healthy returns
Safe investments and healthy returns are not phrases that we hear in the same sentence very often. Higher returns are usually associated with higher risk and many perceived ‘safe’ investments offer a return barely beating inflation – and with bank savings accounts even this meagre target isn’t achieved. Failure to beat inflation means that you are effectively losing in real terms money, hardly the intention when you started investing or saving.
Of course, there are investments that do pay reasonable returns but you need to search for them and when you find them do your due diligence and thoroughly check them out. Failure to do so could have profound consequences in the long run. Tangible assets give investors a level of confidence as they can see and touch them although this alone doesn’t mean that they are safe, let alone pay a healthy return. The obvious tangible assets are gold and property but anything that wouldn’t get classed as a ‘paper’ investment has the same benefit.
For most people investment properties are a great option although you need to ensure that it is the ‘right’ property as just buying any property will not suffice. Investments properties usually serve a dual purpose, to achieve capital growth and generate an income in the form of rent. It is this second part that can be harder than you may imagine even with there being high demand for rental accommodation and holiday lets. Quality tenants are what all landlords are searching for and finding them can be a lengthy process that can on occasions prove painful.
Property management companies can offer some solutions although there are few guarantees other than they will ‘manage’ your property on your behalf – something that is very broad. If you are looking for guarantees then you will probably need to think about investing in a rental guarantee concept and this, very often, means investing abroad in a property offering holidays lets. This is not something that some investors are comfortable with but if you do appropriate research then it is no riskier than buying a property in your home country.
Rental guarantee concepts work by a company, usually a developer, building a property or properties and selling them selling them purely as investments – the end users is not intended to be the owner. The developer or related third party then ‘rents’ back the unit from the investors for an agreed amount for an agreed period and they in turn sub-let it out to generate the return. This certainly reduces the risk of any problems with tenants as the rent is paid by the developer rather than and individual.
Here in Thailand we have seen this go one step further with major 5-star international hotels offering the same concept. This gives investors great confidence as they have the backing of the hotel group and all the benefits that it entails including financial backing and prime locations, not to mention marketing and the quality of the teams running them.
There are three such deals that are presently available that will appeal to many investors looking for healthy returns in safe investments. The first is in the completed Amari hotel in the popular resort of Pattaya. This rental guarantee concept offers guaranteed returns of 5% p.a. for five years followed by projected returns of 8% p.a. in subsequent year – quite a healthy return we are sure you would agree?
There are two further notable deals on the island of Phuket in the south of Thailand in the Ramada and Best Western hotels. Both hotels are still under construction and therefore offer greater returns. The guaranteed return is 7% p.a. for five years and projected returns of over 10% in following years. Again, this is a very attractive and healthy secure investment backed by two major 5-star hotels.