Will you consider on Guarantee Rental Return (GRR) project?

Do you think GRR is stable and trustable? Hows ur experience?

For a new project in a new landscape yet to be developed...I would have a reserve view against GRR as the market is still in it's infancy..

However, for a market which has reached it's puberty I would go for it...but there are also lots of factors to take into account before making the decision.. 

GRR if by well known developer. Can consider... usually around 6% per annum GRR? so which means is around 15 years will get back the initial investment amount, but i think it comes with more complicated calculations. No?

Dominic, normally GRR will not really offer for that long term. but of course gotta be aware on the terms and condition and also the company that give you GRR (developer or other company)

Usually for how many year then GRR normally offered? Initially i presume the GRR is until get back 100% ROI. My bad

Haha no such 100% ROI scheme. If got dont think developer wanna sell it :) So far never encounter before

It's important to go through clause by clause in the GRR agreement...usually is a 3+3+3 GRR...if they promise a 15years GRR...I'm sure something is just not right and smells fishy...greed is what GRR target...

I think in GRR one of the thing we need to find out is why is GRR offers at the first place. We should sort out all the questions like What Why Where How Who etc...

Just my 2 cents...

still need to see the location. with GRR but in poor location at the end cant sustain.

If there is, I will definitely have a try on it. Must see how many percent of ROI and GRR first.

If the GRR deal is so attractive. Even if the developer hold onto the unsold units, they will still be able to rent out?

is there any project that we can refer to in connection with the GRR project

I wonder how successful this will be?

@domng developer may prefer to sell out the unit to get quick cash. unless they want to play for long term to collect rental.

@6011_3531_5354 

You can say that again.

Especially if the developer is eyeing the banks to set up branches at their shoplots... I have heard banks do not want to purchase shoplots, they prefer to rent only.

Banks~wherever their branch is setup usually the property around that area will boom! But there are still some exceptions to this theory...lol...

@domng bank will prefer liquidity. and can reallocate while needed.  

@6011_3531_5354 

Those owners who rent to bank for long term... really hit the jackpot!

I have heard banks will offer higher than market rate renting a commercial unit for its operations.

@azita_fmlzi You can refer to to The Lexis Group which comes with GRR. The 1st project was handed over in 2006 and the 2nd in 2009. Currently collecting 7% rental via profit sharing as the GRR period already over.

Latest completed project with GRR is the Lexis Suite Penang and Lexis Hibiscus 

Check this out:

http://www.lexishibiscuspd.com/en/default.aspx

http://www.grandlexispd.com/en/

http://www.lexissuitespenang.com/en/

From my viewpoint and not because I sold all this projects before, the main thing for a GRR project to be successful is usually the Operator/Hotel and developer. The developer because they kept their promise and the operator does a good job.

Thanks! My 2 cents.....

@eddienfs1 

thanks for sharing. Any news on GRR projects in Johor?

Personally, I always think that GRR is an indicator that developer had a problem with selling the properties. 

@eddienfs1 cool. any info about the project with GRR for project near university? 

@ domng   @6011_3531_5354

The project is @ JB is by Mahsing Group. Total project is on 8.19 acres of land with 2 phases. 1st phase is residential and phase 2 is office block and 2 hotel building.

The 2 hotel block is by Ramada Encore(3 Star) and Ramada Meridin (4 Star). Location is 1.5km to Legoland and near to Universities (Educity Iskandar)

GRR is around 7% for the 1st 3 years and profit sharing for the next 6 years. After the 9 years period will be up to JMB to decide on the continuance. 

For more info on available units you can whatsapp me at 0189873757.

Cheers!

@Fikri_Azzim The GRR concept was started as a means to get faster funding whereby the developer can use the money to build more hotels rather than to build 1 and wait for business to pick up and then only start building another.

This way developer and buyer is in a win win situation whereby the buyer gets to enjoy being a hotel owner(part), earn money on investment and have a hassle free property. Developer gets more funding and can proceed to other developments, still retain control of the property, make money also on the rental for long term.

But a word of caution. Make sure the developer has a good track record and the hotel operator is reputable. There have been cases whereby developers try to emulate the concept but fail due to inexperience and greed. However, Not gonna mention names....

I see, now I understand the concept. I have bad experiences with GRR though, not this one and yes not gonna mention names as well...

Thanks @eddienfs1 for the explanation.

@Fikri_Azzim Most welcome!

@eddienfs1  How about the Guarantee Rental Return (GRR) project for university one? 

@6011_3531_5354 

Hi Nic, this is near Educity and Legoland which is basically better than just for University, You would be referring to units taken as HOSTEL for students. As you know, uni have limited time whereby the students moved in and out. Moreover, you might not have the advantages of a hotel operator whereby they will take care of any problems pertaining to the hotel unit like airconds problem, plumbing, furnitures and refurbishment which is all at Hotel operator cost. Hence the Hassle Free Concept. 

@Fikri. Please say out loud the developer for your bad experience. So that other investors don't fall into the trap, like you did. Thanks 

@jdh thanks for sharing