"Lend me a tenner and I'll buy you a drink" Should guaranteed rental be regulated:

[ajapale]

Apologies to the Pogues song but does anyone agree that guaranteed rental arrangements should be regulated by IFSRA or the equivalent regulatory body in other EU countries?

 

[OverseasCafe]

Re: "Lend me a tenner and I'll buy you a drink" Should guaranteed rental be regulated

In an ideal world yes indeed guaranteed rental should be regulated, the problem lies in the mechanism for actually doing so.

Obviously IFSRA could only influence actions in Ireland, for overseas property that covers virtually no companies of which we're aware.

This leaves it up to the regulatory framework in the country in which the guarantee is being promised and executed so you are down to this country's ability and desire to do so.

It is one thing to say that a developer is including the guaranteed rental in the price of a property but quite another to prove it. Most of them aren't facilitating enough to have one price for guaranteed rental product but another for property with no guarantees. The typical approach is to offer guaranteed rental with a certain block of apartments, but none on a different block with different specifications or on villas in the same development. As these are not equivalent products a valid comparison cannot be made. Even if they did, they are perfectly within their rights to charge different amounts for different 'products' or 'packages' whatever they may be. If someone is stupid enough to fall for an approach which charges different amounts for guaranteed rental properties than standard properites in the same development then no regulation is going to help them in any case.

Issues of non-payment come down to a legal breach of contract, presuming you have it in writing that they will give you the agreed rental. This, of course, involves taking a company to court in a foreign country and most management companies will be well aware that this will be the last resort for most people.

Essentially if you are not dealing with a reputable management entity that has a strong track record and accounts to back up their claims you should be very wary of promises of guaranteed rental. They are often not worth the paper on which they are written.

 

[GDE]

Re: "Lend me a tenner and I'll buy you a drink" Should guaranteed rental be regulated

I would echo Overseascafe, I cant see how it could be regulated effectively unless there was an EU regulation, but even that would be very hard to enforce.

In my opinion there needs to be a single source of information that breaks down an overseas purchase and the real ins and outs of every part of it.
It needs to be heavily sponsored and someone needs to back it so that it becomes well known and easily found for a novice investor looking to buy overseas.

The only people capable of producing such an information source are developers in my opinion, or vastly experienced agents. I say this because a developer knows all the tricks, spin, and ins and outs, whereas an agent doesn't necessarily because they get the spin from the developer. Obviously someone like overseascafe has enough experience to advise on such things but in general I don't think your average agent does.

Theres got to be no properties for sale alongside the information, no links to agents or sellers. Just an information service/website which explains the tricks and spin to watch out for when you are investing overseas.