Recently DevDosh Ltd found an interesting things regarding crowd-funding platform The Resort Crowd Limited is offering the opportunity for investors to buy into the holiday destination Cape Verde, the platform offers returns of 7% on properties that are either ‘under construction’ or 5% on properties that are already built.
Investments start from as little as 10 GBP with no limit on the amount that can be invested, though no one investor can own more than 19.9% of an individual property.
Kim Collier, operations director at Resort Crowd, said: “Cape Verde is one of the fastest-growing tourism markets in the world.
“We’re giving investors the chance to beat the crowds and be among the first to buy into this next big holiday destination through what is an increasingly popular form of DIY investing.
“Not only can they add a slice of resort life to their investment portfolios, but they can also get fixed, market-beating returns, guaranteed by one of the biggest companies in the industry.”
The investment is set up through an SPV or Special Purpose Company and the investor owns shares in that company relevant to their investment.
An SPV is set as a limited company under UK law so as such all protections that a shareholder of a UK company would receive are afforded to the investor.
In DevDosh Ltd opinion, there is one important point any would be investor should look out for is if the scheme is asset backed to protect their investment.
Another important factor to consider is to ensure that the SPV is registered in the United Kingdom and not overseas.
This type of investment into holiday homes is very similar to timeshare and has been done before to disastrous effect when Harlequin Property lost over 300,000,000 GBP of investors money.
According to The Resort Crowd, the 7 per cent return is sustainable because “the underlying assets (the properties) are supported by a guaranteed revenue agreement secured with a leading international tour operator”.
“The agreement ensures minimum levels of occupancy and guarantees 94 per cent of the asset providers assumed hospitality revenues, whilst only accounting for 57 per cent of existing hotel inventory.
“This effectively means a set return based on the agreed levels of income in the agreement, as well as allowing for other large tour operators to contribute additional occupancy performance and hospitality revenues to the asset provider.
“In effect, the property will receive a return by way of room revenue regardless of whether it is actually occupied, which clearly demonstrates the asset provider has the ability to service its contractual obligations to investors.”
But for DevDosh Ltd this is all dependent on the tour operator generating enough business and more importantly staying in business.
For a UK based property development SPV that is asset backed to level of 120% of the investment and offers 10% annual returns please visit DevDosh Ltd today