Emerging Property Investment

Clive_Scott

Good Day Martin/Forum
I retired from the military and now I am looking to invest my hard earned cash in a suitable investment package. I have enquired with a number of companies who deal in investment properties linked to the Student Accommodation and Holiday-Let business. One company in particular seems to have a good package of investments - emergingproperty.co.uk which uses a solicitor I think 'Browns' in the north East of England to do its legal contracting work. What attracts me to the package is the following:
1. Yields of 8-10% of the purchase price every year for a minimum of 10 Years.
2. No additional costs - stated in its advertisement.
3. Zero Management Fees.
4. Zero Ground Rent.
5. Zero Service Charge.
6. Zero Agency Fees.
7. Zero Maintenance Fees.


The question I have is this investment too good to be true or should I proceed to invest?

Just want to thank all of you who responded. Most of what has been written makes absolute sense and I appreciate the guidance contained therein. Based on the feedback I will avoid this type of investment and look for safer and more secure options. Best wishes to you all.


Thank You in anticipation of your assistance with this request.

Aegis

Personally I wouldn't touch these with my own money, let alone client money. These sorts of things always look good on paper, but bear in mind that this could be a very illiquid asset and you may find it difficult to sell when you no longer want to hold it. In addition, the yield sounds good, but what if the underlying company fails? Will anyone else pick up the guarantee and continue paying you, or will you simply have to take what you're given - if anything?

These sorts of investment should really only be marketed to experienced investors with very substantial portfolios. I would suggest that if you are genuinely looking only into property investments you may wish to consider looking at regulated property funds in the form of unit trusts or investment trusts. These at least are regulated by the Financial Conduct Authority, meaning there's a strong culture of oversight and auditing of all values quoted. I wouldn't suggest going all in to property, but instead diversifying across asset classes, but looking into these alternatives is hopefully a good start to steering you away from unregulated investments, which are a minefield.

eskbanker

OP - you might also wish to reconsider whether it's sensible to use what is presumably your real name alongside identifying data about your background and statements that you have a lump sum that you're keen to invest, as this could lead to an increase in the number of cold calls you receive!

ChesterDog

Before you look at the obscure, high-risk, scam-happy, unregulated, flashy claims end of the market...

Monevator.com

xylophone

You have no experience or knowledge of investments?

Had you considered consulting an Independent Financial Adviser?

bostonerimus

1. Yields of 8-10% of the purchase price every year for a minimum of 10 Years.

This would be enough for me to walk away from this investment.

I retired from the military after serving 33 Years in the RAF and now I am looking to invest my hard earned cash in a suitable investment package.

Just an observation, but investing should be a life time occupation. You should have been investing for the 33 years of your service rather than waiting until you retired.

dellboy102

bostonerimus wrote: »

This would be enough for me to walk away from this investment.



Just an observation, but investing should be a life time occupation. You should have been investing for the 33 years of your service rather than waiting until you retired.

True but lets not demotivate the OP, as they say the best time to invest was yesterday, the next best time is today

Gadfium

Clive_Scott wrote: »

1. Yields of 8-10% of the purchase price every year for a minimum of 10 Years.
2. No additional costs - stated in its advertisement.
3. Zero Management Fees.
4. Zero Ground Rent.
5. Zero Service Charge.
6. Zero Agency Fees.
7. Zero Maintenance Fees.

It's either a scam or a very high risk investment with significant chance of capital loss.
After all, if they could return 32 times the BoE interest rates then they'd be multi-billionaires by now and wouldn't have to deal in student lets.

bostonerimus

dellboy102 wrote: »

True but lets not demotivate the OP, as they say the best time to invest was yesterday, the next best time is today

My comment was a little blunt, but to paraphrase "A League of Their Own", "There's no crying in finances".

The OP is probably better positioned than many though as I expect they'll be getting a military pension. It's hard to make any recommendations (other than to probably walk away from the scheme mentioned in his original post) without knowing a lot more about their financial situation and goals, but if the OP is interested in property and they have a lot of cash they might buy an income property for themselves or simpler still, just buy a portfolio of low cost tracker funds. If the OP has guaranteed income from a military pension that portfolio could be quite aggressive.

Malthusian

bostonerimus wrote: »

Just an observation, but investing should be a life time occupation. You should have been investing for the 33 years of your service rather than waiting until you retired.

As was mentioned he probably has a military pension so it is unfair to suggest he has not been investing throughout his service. I would not expect someone who may not know where they are going to be living from one year to the next, and spends their life being shot at, to take a long term view with regard to their cash.

As for the investment - a yield of 8-10% is very poor given it has a risk of 100% capital loss, when over the past few decades you could have expected similar returns from diversified stockmarket portfolios with much lower risk and much greater liquidity. So no, it's not too good to be true, nowhere near good enough.

Aegis wrote:

These sorts of investment should really only be marketed to experienced investors with very substantial portfolios.

You know, we always say this when we're deterring inexperienced investors from going for such schemes, and yet I've yet to come across any experienced investors with substantial portfolios who have put a small proportion - say 5-10% - of their portfolio in unregulated mini-bonds with 100% capital loss potential. I've known a fair amount of experienced investors with substantial portfolios - via this forum and IRL - and not one of them invested in these things. The only people I've come across who own this type of investment are those who have been persuaded to put all of their savings in such investments and are now desperately trying to figure out how they can get their money back. Apart from Smed / Anthorn or whatever his name was.

When someone has let's say £1 million in diversified regulated investments and has let's say another £100,000 to invest, they tend not to say "Ok, I've got enough in stockmarket investments, I'll invest this money instead in loans to some random property company with no track record, even though the promised yield is no more than I'm used to getting from the stockmarket and I could easily lose all of the capital". What they tend to actually say is "Regulated diversified stockmarket investments have done well for me so far, I'll put my money in more of the same." Rather than say "It's only 5-10% of my portfolio so I could afford to lose it" they say "Why would I want to lose money again?"

coyrls

..... And there is no such thing as "Emerging Property".