Previously on this blog I have preferred to review individual investments. But there is currently a plethora of firms offering investment in a myriad of hotel rooms, and as it's impractical to review each hotel room individually, I decided to write a general guide.
This article is about investments which work as follows:
- A larger property is divided up into individual units, and the units are sold to investors. For example, a hotel is divided into hotel rooms, and the hotel rooms sold to investors. Or a car park may be divided into parking spaces and the spaces sold to investors, or a self-storage facility may sell off its storage pods. The promoter of the scheme still owns the hotel, the car park or the storage facility.
- Unlike a buy-to-let flat or similar property investment, the investor does not manage the investment and is not responsible for generating the return. This responsibility remains with, or is "leased back" to, the promoter of the scheme to which the investors gave their money.
- Unlike a buy-to-let flat, the investor does not receive a variable rent, but is promised a fixed return by the scheme promoter. Promised returns of 8% - 12% are common, although it can be more or less.
(In some investments it may be optional to "lease back" the investment for a fixed return. But in practice, the vast majority of those who buy the investment will. It is after all unlikely that they will do better by managing the investment themselves than the 8 - 12% the promoter is offering.)
Solidus Technologies Limited is offering unregulated 3 year bonds paying interest as follows:
- Three-year Fixed Term Bond: 10% annual interest in year 1, 3% per quarter (12% per year) in years 2 and 3, plus 10,000 alternative cryptocurrency coins for every £10,000 invested.
- High Net Work Fixed Term Bond: for investments above £100,000, the terms are as above but the quarterly interest is 3.62% instead of 3% in years 2 and 3.
- Three-year Compounded Bond: interest of 37.9% paid at the end of the three year term (11.3% compound interest), plus 10,000 alternative cryptocurrency coins for every £10,000 invested.
- High Net Worth Compounded Bond: for investments above £100,000, as above but the interest is 44.21% (13.0% per year) instead of 37.9%.
for a review of Solidus Technologies' bonds.
Buy 2 Let Cars Limited offers the opportunity to invest in lease cars over a term of three years as follows:
- Level 1: invest £7,000-£10,000 and receive a return of 7% per year
- Level 2: invest £14,000 to fund "one unit" and receive a return of 9% per year
- Level 3: invest to fund "two to six new units" (presumably £28,000 - £84,000) and receive a return of 10% per year
- Level 4: invest to fund "7 or more units" (£98,000 or more) and receive a return of 11% per year
Investors' funds are used to purchase a lease car which is then leased out to a borrower. The borrower's lease payments are used to generate the promised return.
If the borrower defaults on their payments, and Buy 2 Let Cars is unable to find another borrower, Buy 2 Let Cars will attempt to sell the car to return investor's capital. If the amount realised is less than the investor invested, Buy 2 Let Cars promises to make up any shortfall up to a maximum of 85% of the amount invested.
for a review of Buy 2 Let Cars' investment.
Viderium Limited is offering a 3 year bond paying 9.8% interest per year, paid out quarterly.
The bond is promoted as offering "A Rated Indemnity Insurance".
Continue reading for a review of Viderium's bonds.
Hanover Merchant Capital is offering the opportunity to invest in lease-back contracts for the delivery of mineral water from an aquifer in New Zealand, which pay "annuity type" income of 5.29% each year. After two years, the contract is sold for which Hanover Merchant Capital projects "up to 30% aggregate capital return", with the caveat that this is "subject to market prices".
In email promotions, the investment is promoted as offering "NO Capital Depreciation" and "Secure Underwritten Investment".
Continue reading for a review of Hanover Merchant Capital's mineral water investment.
Intergroup Mining Limited is an Australian gold mining company offering unregulated 12% convertible loan notes paying 12% per year over three years.
Continue reading for a review of Intergroup Mining's bonds.
Amicus Invest offers three unregulated offshore investment products:
- Amicus Bonus Cash Account: Pays 4% per year interest (3% on balances calculated daily and a further 1% "bonus" on balances calculated quarterly). Funds can be added and withdrawn at any time.
- Amicus Regular Savings Plan: Pays interest on monthly investments as follows: 6% for a 1 year term, 7% for a 2 year term, 8% for 3 years, 9% for 5 years and 10% for 10 years. Early withdrawals are permitted but forfeit all interest accrued.
- Amicus Single Investment Plan: Fixed term investments paying interest as follows:
- 3 months - 4% per annum
- 6 months - 5%pa
- 1 year - 6.25%pa
- 2 years and 3 years: "Guaranteed Total Return of 15.00% (equal to 7.25% pa.) and 26.00% (equal to 8.09% pa.)"
- 5 years and 10 years: "Guaranteed Total Return of 45.00% (equal to 8.75% pa.) and 100.00% (equal to 9.50% pa.)" - these numbers don't add up, as a 45% return over 5 years is 7.7% compounded, and a 100% return over 10 years is 7.1% compounded.
for a review of Amicus Invest's cash accounts and bonds.