using pension pot to buy foreign investment property

tonweight

First timer here
My financial advisor has asked me to consider using my pension pot to invest in a hotel type property in Hurghada, Egypt. Has anyone any experience of these types of investment? The returns are guaranteed for two years with a buy back scheme after 8 years. How risky are these can the developer disappear with your money or is it protected in some way. The investment is done throught he Orbit Group.

Many thanks

kindofaverage

oh nooooooooooooo. pleaseeeeeeeeeeee please please be careful. Developers will NOT keep to their promises of guaranteed rental. Hurghada is desperate for money and the more they can get out of foreign investors the better. I would not touch anything there as we have had our fingers burnt in this country. Thousand of pounds worst off. Contracts are not worth the paper they are written on and things are made up as they go along. The usual garbage that they come out with is - oh this is egypt. What I am curious with is why is you FA recommending this - this is very dubious as scamming people is the norm there. please pm me if you can but as a 'newbie you may have to post more.

dunstonh

My financial advisor has asked me to consider using my pension pot to invest in a hotel type property in Hurghada, Egypt.

Are you sure he is doing it with a financial adviser hat on? These are unregulated speculative property investments. Most advisers wouldnt go near them unless your wealth is high enough that investing throw away funds in such projects makes sense.

How risky are these can the developer disappear with your money or is it protected in some way.

Pretty much a high as you can get. Virtually no consumer protection in an unstable region with poor adherence to laws.

Do you have the money to throw at it or are you reliant on it?

xylophone

:eek:
"Be afraid, be very afraid.."

If the scheme went belly up, would you be facing a retirement in near penury?

kindofaverage

another bit of advice, please check the place has been built.

tonweight

Thanks for your replies


kindofaverage another bit of advice, please check the place has been built.


Yes it is partially built roof on etc being fitted out at the moment.
dunstonhQuote:

My financial advisor has asked me to consider using my pension pot to invest in a hotel type property in Hurghada, Egypt.

Are you sure he is doing it with a financial adviser hat on? These are unregulated speculative property investments. Most advisers wouldnt go near them unless your wealth is high enough that investing throw away funds in such projects makes sense.

Quote:
How risky are these can the developer disappear with your money or is it protected in some way.
Pretty much a high as you can get. Virtually no consumer protection in an unstable region with poor adherence to laws.

Do you have the money to throw at it or are you reliant on it?

No I dont it would take everything in my pot - mind made up - Thanks

Sorry cant get the hang of the copy & paste on this yet

Aegis

From a personal perspective, if I heard of a friend or relative being advised to do something like that by an IFA, I'd be telling them to look for a new IFA. These sort of schemes are far beyond the risk you'd usually accept within a pension, so unless someone is a sophisticated and experienced investor themselves, you wouldn't expect this to get through a decent compliance department.

From a professional perspective I'd probably say much the same but with a little more tact!

dunstonh

From a professional perspective I'd probably say much the same but with a little more tact!

Tact? what's that. I think it was something I used to have when I was younger.

I have never understood the fascination of using weird unregulated investments when the simple options are so often the best.

CannySaver_2

Hi

I'm glad the OP has decided against this investment, it is fraught with danger and best avoided in nearly all circumstances.

I've been offered some weird and wonderful investments recently in my SIPP including a French holiday complex and the French don't even recognise UK trusts so I don't know how my SIPP could have bought it. I was also offered cemetary plots in the West Midlands, fractional ownership of a graveyard anyone?!?

All these schemes have a number of things in common:

1. They all say they are "SIPP approved" which is frankly a load of cobblers, it makes them sound as though there is some sort of body which approves SIPP investments, this just isn't true, it is simply the investment provider saying they believe that it can go into a SIPP and that they have found some SIPP provider or other who will take it

2. They all use the word "guaranteed" in some context or other e.g. in the first two years returns or as a buy back. The initial guarantee is generally just using your own money as the purchase price has been inflated or it is using other investors money who will follow in behind you

3. These are not (in the main I hope) being peddled by IFAs, no IFA would ever suggest you put 100% of your assets in any one scheme

4. Simply avoid these schemes, there are plenty of ways of getting exposure to property, if that's what someone wants, in my opinion Uk commercial property is currently a good buy. And the guarantees are not worth the paper they are written on (generally)

Two wider points to finish my rant. Firstly these investments and the people who peddle on them are playing on the insecurity of investors which has built up over the past few years due to volatile stockmarkets, offering a guaranteed return equal to what one could hope to get from the markets is bound to be attractive to the more financial niave. Finally, the SIPP providers need to get their house in order as there are clearly some allowing this c**p in, the better and more ethical SIPP providers, as well as IFAs, need to start naming and shaming the SIPP providers who allow these investments into their SIPP.

Talking of SIPP providers I recently changed min and used this to narrow down my own choice of SIPP and used the following list to do my own SIPP research:

http://www.!!!!!!.uk/sipp-zone/sipps/

Needless to say my SIPP doesn't hold property in Egypt, the Caymans or that wonderful graveyard in Birmingham!

The Canny Saver