Top investment? Guaramteed 10% pa

[F4UCorsair]

I just read an ad on TV for property returning a guaranteed 10% pa. It seems like a huge conglomerate, doing everything from buying land, designing, building, marketing, etc., 'in house'.

Now 10% on property, anywhere, seems unrealistic in 2016, unless you calculate the return on what you paid 20 years ago, and that's unrealistic.

They make a point of saying that investing in shares is problematic because the value fluctuates, and they're right, but good companies always recover.

They sell you a property and lease it back for 5 to 20 years, and wait for it, will then buy it back AT THE PRICE YOU PAID, PERHAPS 20 YEARS BEFORE!!!!

Some investment, but I suppose there's a sucker born every day so maybe they do sell some property.

[tingtong]

The 10% a year guarantee usually runs for a 2-3 years period...

Little misleading, I think, but if the seller would rephrase it, might you get your answer...

What if they call it a 20% discount if you buying from the drawing table/planning stage...and there you go, it equals to 2 years 10% return

( even less if the developer actually able to rent part or full during the period).

What if you name it an early bird discount?

What if you find that this is a way to sell actually lot less desirable units, with a catch, instead of instant discount?

But I think to put the offer in perspective, you can use the SET traded REITs as a guideline....the average return( dividend, often paid quarterly) falls between 6-7% net.

So, offering 8-10% "rental income" for a limited period might only represent a small discount in real life, but yet the catching phrase probably can hook few fish for developers

[Asiantravel]

The 10% a year guarantee usually runs for a 2-3 years period...

Little misleading, I think, but if the seller would rephrase it, might you get your answer...

What if they call it a 20% discount if you buying from the drawing table/planning stage...and there you go, it equals to 2 years 10% return

( even less if the developer actually able to rent part or full during the period).

What if you name it an early bird discount?

What if you find that this is a way to sell actually lot less desirable units, with a catch, instead of instant discount?

But I think to put the offer in perspective, you can use the SET traded REITs as a guideline....the average return( dividend, often paid quarterly) falls between 6-7% net.

So, offering 8-10% "rental income" for a limited period might only represent a small discount in real life, but yet the catching phrase probably can hook few fish for developers

not only that I think in this particular instance one should be far more concerned about return of investment rather than return on investment

[South]

Just seen an advertisement for a restaurant on a Gulf island being sold for 12 Million Baht. Monthly rent is 350k and salaries 250k so 600k/month not including stock/electric/taxes etc. That gives an annual outgoing of, not including the purchase price of 12M, 7,200,000 + stock/electric/taxes etc .

So for the first year, a yearly total, including the purchase cost will be 19,200,000. Add on to that the costs of ingredients, drinks that you have to buy (forgetting about the profit) and maintainence etc and your first year expenses are going to touching 30Million.

Who is going to going to put themselves into that situation?

[happy chappie]

If I had 20 million I would rent a nice condo and put my feet up and enjoy life.not gamble it on Thailand.never ever put all your eggs in one basket,you can end up with a white elephant.

[Briggsy]

My 1996 ISA has returned a compounded APR (US : effective annual rate) of 10.64% over 20 years. If someone had advertised that, I would have dismissed them out of hand. Now worth almost 8 times the investment. It has mainly been down to Fidelity Special Situations.

[fletchsmile]

My 1996 ISA has returned a compounded APR (US : effective annual rate) of 10.64% over 20 years. If someone had advertised that, I would have dismissed them out of hand. Now worth almost 8 times the investment. It has mainly been down to Fidelity Special Situations.

Fidelity Special Situations had some stellar years under Anthony Bolton. I used to hold that fund as well under his tenure

Even more pronounced is that of your return mentioned the first 10 years were stronger than the last 10 and would be well more like 15% p.a. The key though was it was never guaranteed and we knew that while he had a great track record there were always risks.

Return for the last 10 years is about 90% total or around 6.6% p.a, which is probably more realistic in today's world under the current manager.

So notwithstanding that there are some great fund managers out there that can generate some great returns for us, as you mention, "10% guaranteed" is an offer to be taken with caution. Firstly the guarantee and secondly 10% these days is much harder to achieve. 10% is not impossible but will come with risk.

To OP, Haven't seen the property ad mentioned, but there's been other threads around on this type of things. Be very careful with it. Wouldn't touch it myself. Usually there's some small print and your paying for the guarantee one way or another, eg they charge you more for the property than a comparable one would be. You have to buy standardised furniture which costs more than you would normally spend etc. example below. some links in there too.

http://www.thaivisa.com/forum/topic/906601-10-return-on-investment-too-good-to-be-true/

Edited May 10, 2016 by fletchsmile

[MyFrenU]

You can still make 30%+ yield on property rentals in the UK but that is for HMOs or Houses of Multiple Occupancy.Basically slumlords (mostly Asian) renting out to people on social security benefits not the nicest job trying to get the rent from these people although the government will be paying a lot of it!