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Today, a top property expert warned investors to beware of false rental yield guarantees made by some developers and agents.

John Scott, from hotel investment specialist Asset Property Brokers, said: “Some rental yield guarantee schemes, typically offered over a period of two years, are actually funded by the purchaser buying the property at an inflated price. For example a property priced at £80,000, but worth £60,000, allows the developer to give back to the purchaser £20,000, fulfilling a guaranteed yield of £10,000, or 12.5 percent per year over two years. This ruse particularly applies to apartments, villas or hotel rooms, built in areas with poor occupancy rates and oversupply. The result is at the end of the guarantee period in the third year buyers are left with properties that earn them very little, if any, rental income, and a financial disaster.

“To avoid this, purchasers in the case of hotel projects must examine occupancy rates for the area and the managing company’s long term booking contracts. Similarly, for renting out villas and apartments purchasers must check where the demand will come from and whether there is oversupply in the area.”

Asset Property Brokers has properties available in the Philippines at Blue Coral Resort and Spa, Mactan Island, within 30 minutes of Cebu airport, the country’s second busiest airport. Among many attractions the island boasts reef diving, golf and powder white sand beaches.

Developing the Blue Coral Resort and Spa is Paradisya Land, one of the Philippines’ leading developers. The firm has a highly successful track record in creating major new tourist destinations.

The resort, managed by Continent Hotel and Resorts, has secured a major five-year booking with top South East Asian tour operator, Oriental Spirit Travel & Tours Corp, a subsidiary of Hyundai and Samsung.

Blue Coral Resort offers a guaranteed 80 percent occupancy level, on a rolling five year contract, providing returns of 14.4 percent to 20.9 percent, depending on the property type. Guaranteed 60 percent non-status developer finance is available.  Owners are entitled to 20 percent or around ten weeks’ free stay a year.