If you’ve just acquired an investment property and are looking to generate income from it, opting for a rental guarantee program is one of the easiest ways to do so.
Most developers in Phuket offer investors the chance to receive guaranteed returns on their property investments, which is usually between 5-10% of the original property price for up to 15 years. With the help of a management company, the developer will rent out your property, organize all technical aspects of the lease, and maintain the property.
In Phuket, you can normally find two types of rental guarantee programs—Guaranteed Returns Program and Rental Pool Program.
In Guaranteed Returns Programs, the developer guarantees an annual rental return of a fixed percentage from the property price for an agreed number of years. For example, if a developer offers “7% Guaranteed Rental Return for 7 Years” on your investment, it means that you will receive 7% of the property price yearly for the next 7 years. There’s even an option to make that rental return payable twice a year at the rate of 3.5% every 6 months, which is very convenient. It’s a simple yet profitable concept!
Many hotel business operations offer rental pool programs. Once a project is complete, the hotel management will manage the projects and rent it out on daily basis. All units will be divided into different pools depending on the room type, size, and view, which means that the same type of units will be in the same daily rate as it normally appears on the hotel website and other platforms, such as booking.com. Rental profits will then be shared between these pools accordingly and after that, they will be shared between the owners inside of each pool equally. In other words, you are entitled to receive an equal portion of the total rental income, even if your property has not been rented out on certain days or weeks so that it’s fair and secure to every investor.
The answer to this question depends entirely on your investment goals and preference. It’s no competition!
Both programs are hands-off investments that offer up to 3 weeks of free stay in the property every year. Owners can enjoy all the resort-like facilities, like the fitness center and swimming pool, and receive discounts at on-site restaurants and spas.
The main difference between the two programs is the returns you enjoy. With the Rental Pool Program, the amount of your returns is not fixed in the agreement, which means that your income has no upper limit and can easily reach up to 15% per annum. With the Guaranteed Returns Program, the amount of your income is always fixed in the agreement, and you will never get any less or any more than the specified amount.
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