New flats, guaranteed returns, no running costs: too good to be true?

Albermarle

There seems to be a spate of similar offers recently. I saw one for 10% on student accommodation.
UK Student Accommodation Investment - 10% Net Return (ayanaproperties.com)
Seemed equally too good to be true.

Stubod

...count me in...what could possibly go wrong....where do I send the money to???

Albermarle

Stubod said:

...count me in...where do I send the money to???

I will PM you with my bank details !

TBC15

Guaranteed returns……… well that puts my mind at rest.

They must be some sort of charity if they give money away like this.

mongoose2009

I have some magic beans too

Growingold

Which investment company is it?  Might be helpful to know.  Frog_Prince said they had good reviews.  Are they shown on their website?  Personally not known of DWP being responsible for such a long term covering rents, maintenance etc.  Maybe 3 or 5 years max but I could be wrong.  And paying the service charges too does smell fishy.

george4064

Sounds as legitimate as Harry and Meghan's 'near catastrophic' car chase through downtown New York!

Sg28

Frog_Prince said:

I received the e-mail below from a property investment company. They attract good reviews.

What should I be asking them about this scheme?

"Good morning,

 3 completed apartments have come back to the market offering an 8.5% NET return per annum guaranteed for 25-years, increasing by inflation each year. The rents are paid directly by the DWP (UK government sector).

 Each apartment is priced at £152,941 and gives you an immediate guaranteed income of £1,084 NET per month for 25 years. This income will increase every year with inflation, expected returns below:

• Year 1 - £1,058 NET per month / £13,000 per annum – 8.5% NET.
• Year 5 - £1,267 NET per month / £15,208 per annum – 9.9% NET.
• Year 15 - £1,875 NET per month / £22,500 per annum – 14.7% NET.
• Year 20 - £2,881 NET per month / £27,374 per annum – 17.8% NET.

 You have zero running costs, all service charge, maintenance, repairs, damages, management, council tax and utility bills etc are covered for 25-years.

 You are free to sell whenever you like. Capital growth will also be high, expected between 30 – 40%. The exit strategy is very quick and easy.

 The apartments are completed and your income starts immediately..."

My first question would be: Why are these flats not being sold on the open market? Where a net yield as stated and such incredibly favourable terms would give an asking price of nearer £250k+. 

LHW99

If they made email contact out of the blue I'd treat them the same way I'd treat a phone call out of the blue - distrust on principal.

redux

I was on the mailing list for a crowdshared property scheme, but never invested

It went quiet

When I logged in recently, I learned that it's been in administration for a year or two. And Google tells me now that before I first heard of it, it had been featured on Dragon's Den, attracting no investment.