Medina Elvira – Granada, Andalucia
Guaranteed Rentals

LOW EXPOSURE PROPERTY INVESTMENT WITH
AN AMAZING 5% (UP TO 10 YEARS) GUARANTEED RENTAL SCHEME

Tricks of the rental trade.
By Pat McGoldrick
Irish Mail on Sunday, October 15, 2006

Guaranteed rental sounds a safe bet but it’s not always what it seems read on:

THE GUARANTEED rent has become flavour of the month for Irish overseas property investors – but are such schemes all that they are cracked up to be?

It sounds like a safe investment option, when buying in a country you don’t know much about, to have a rent guaranteed, but it is always worth bearing in mind that the developer isn’t offering it out of the goodness of his heart.
The sting in the tail might be that you are hung out to dry with substantial mortgage payments on a property that is impossible to rent when the guarantee period elapses.

Developers know that these days it often takes more than just a good product to successfully market a development. How he packages the product is often key to successful sales. A rental guarantee is often used to attract investors in early.

But are such investors buying into a false sense of security? Anthony Fernandes  has been involved in the market for many years. He has seen his fair share of the different schemes available – rental guarantees, mortgage-paid options and variations on the theme.
When I spoke to him recently in Marbella, he was forthright in his views. ‘There is no doubt that in some cases, the rental guarantee is built into the price you pay,’ he said. ‘That means you are paying more up front for the dubious privilege of the developer giving it back in the form of a rental guarantee.

‘In many cases, whether they actually rent the property or not is irrelevant to them. The real trouble starts if you are relying on the continued rental income after the initial guaranteed period is over.

‘Key factors to ask before you buy include: What is the duration of the guaranteed rental scheme? If it is a short period, ask yourself on what basis the developer will rent out your property to cover his costs. Long-term guarantees often indicate a bona fide rental programme.’
Mr Fernandes continued: ‘Find out if discounts are available if you do not want to take the guaranteed rental. If there are, you know who is paying for the rental guarantee!

‘Research what comparable properties in the area are renting for and what they cost to buy. Is yours near shops, bars, restaurants and within easy driving distance of an airport?
‘Another important question is: would you rent the property yourself for a holiday? Find out if there are any contracts in place with tour
operators – that, at least, is a good sign that it is a bona fide guaranteed rental scheme for which you are not paying over the odds.’

He pointed out that emerging markets often use guaranteed rental enticements to attract people to buy in a new area and, if the
period is long enough, it allows time for infrastructure to be put in place that might just make the property rentable in its own right.
That is most certainly not the case with the new development at Medina Elviria, near Granada, in Spain, which Mr Fernandes along with O.L.G (Overseas Living Group) is now marketing.

 It is a quality golf development in Mediterranean style with superb views of the Sierra Nevada mountains.' The development offers genuinely good rental prospects: It is 10 minutes from Granada, 20 minutes from the area’s ski resorts, 45 minutes from beaches, 12 minutes to Granada Airport and just one hour from Malaga airport.
‘The company prices all its properties accurately and openly, so there is no room for discounts. Investors are clear about what they get for their money and there are no hidden extras so prices remain low. ‘The guaranteed rental agreement of up to 10 years at 5pc is made on the basis of solid contracts with tour operators. Travel agencies pre-book and supply bank guarantees. There is an investor pack available on request.’
One-bed units are priced from ¨162,950 and two-beds sell from ¨238,450. They can be booked with
a 10pc deposit and are due for completion in September 2008.

"Units at Medina Elviria, offer investors genuine prospects."
By Pat McGoldrick
Irish Mail on Sunday, October 15, 2006

 

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Send to : mal@villas-spain-rentals.com

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