Assured Rental Scheme on New builds

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    Assured Rental Scheme on New builds

    Hello, hoping someone with experience may be able to advise!
    I am considering purchasing an off plan apartment with an assured rental for 10 years. What are the potential pitfalls with these purchases please ?

    #2
    That, like many people who do this, you get ripped off by the developer, who factors the rental costs into the price they sell the property at, which overvalues it significantly and the price adjusts to market levels in the next few years.
    Or they go bust or sell the property on and the assured rental is not available.
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      With any new development is on the reputation of the developer, if the project is delivered on time, how snagging is rectified, what the contract states concerning the rental increases over the period or is it the same, how would you be able to get your property back if you wanted to sell. Usually they add other costs to specking out the flooring, worktops etc, from the base level.

      The list is long you need to do a lot of homework on :

      The development, the purchase, other properties in the area for a similar property so your buying at a premium.

      The warranty, the leasehold deed/titles, services charges etc.

      The rental agreement

      Comment


        #4
        Thank you for your answers. I guess I expected to be paying slightly over, despite the reduced off plan price ! The assured tenancy is what is attractive attractive and I'm satisfied with the service charges and lease.

        Comment


          #5
          While the rental might be attractive it's not as guaranteed as you might imagine.
          Developments are usually single purpose ventures and, if the developing company simply ceases to exist (due to some hard to predict calamity), what are you going to able to do and to afford to do?

          If the developer has a history of decades of happy purchasers, it might be worth a punt.

          The main question you should ask yourself is why they're doing this - it's unlikely to be for your benefit.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            If you are considering buying with a mortgage, remember that such arrangements do not conform with the type of acceptable letting for any Buy to Let lender and don’t accept any assurances that they do by the White sock brigade marketing the development.

            Comment


              #7
              Pitfalls is not getting the market rent . You may be renting below market value for 10 years.

              Comment


                #8
                The assured rental guaranteed is 8% of purchase price for 10 years. We can give 3 months notice to end.
                I had started the hunt for small houses but the above option allows me not to be involved or have the worries of maintaining the properties.
                I guess I'm banking on an easy sell after 5 years if necessary ........

                Comment


                  #9
                  Can you please advise if this is a cash purchase?

                  Comment


                    #10
                    Originally posted by Lesley. H View Post
                    The assured rental guaranteed is 8% of purchase price for 10 years. We can give 3 months notice to end.
                    I had started the hunt for small houses but the above option allows me not to be involved or have the worries of maintaining the properties.
                    I guess I'm banking on an easy sell after 5 years if necessary ........
                    I'm afraid that's patently unsustainable, you'd be a lucky landlord to get 8% yield at current time, especially on a new build. You might get this for a year before they fold at which point you will probably suffer a 25% loss if you have to sell.

                    Comment


                      #11
                      Originally posted by loanarranger View Post
                      Can you please advise if this is a cash purchase?
                      I haven't actually decided that yet ?

                      Comment


                        #12
                        If it is a cash purchase you can do exactly what you like but definitely not with the benefit of a mortgage.

                        Comment


                          #13
                          Thanks all for your replies, I'm researching further. We can't be the only ones interested in this ......
                          I wonder who buys all of these properties...

                          Comment


                            #14
                            Originally posted by Lesley. H View Post
                            I wonder who buys all of these properties...
                            People who are soon parted from their money (in my personal opinion).

                            You have to ask why the developer is doing this kind of deal.
                            It's not to benefit you.
                            When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
                            Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

                            Comment

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