That all sounds interesting, and definitely worth exploring, however, I would just advise some caution when it comes to any “guarantees” (I am speaking from my 20+ years of experience working as a corporate attorney). A guarantee sounds very compelling, and it certainly can be, but it is very important to dig down into the details. First and foremost, you must carefully look at the terms of the guarantee, when it is triggered, what are the exceptions, etc.
Second, and more importantly, who is it that is standing behind the guarantee? Just as a fund can fail, so can a real estate developer or investor (and remember that in Portugal, the funds are regulated by the CVMV, which gives some comfort). Quite frankly, I’ve probably seen more real estate developers go bust than funds, as they are usually taking on entire projects, i.e. with enormous risks. Funds diversify their investments, and so may have one or more bad investments, and you may not get all of your capital back, but presumably if you find a decent fund with experienced management, you will not lose all of your money. So all of that is a long way of saying that it’s one thing to personally buy a property outright and own title. But if you are buying through a developer and relying on them for any sort of guarantee, you should do your diligence on who they are, how long they’ve been in business, what their balance sheet looks like, whether the guarantee is backed by a bank, etc.
Finally, and this is perhaps the most important consideration of all, even if you have covered points one and two above (i.e. you can exercise the guarantee and the guarantor has the financial wherewithal to cover your claim), if they disagree and dispute your claim, are you really going to go after them? If you have lost all of your EUR 350k investment (or more), then yes, you probably will. But what if they didn’t return your 4%, but only 2%? Or if they will only buy back the property for less than your original investment (e.g. EUR 325k or 300k)? At the end of the day, hiring lawyers is an expensive and time consuming process (sorry about that!), and you may end up throwing good money after bad. Most of the time when people have lost money on an investment, they usually just end up walking away.
Please note that I am not by any means discounting an investment in real estate. I admit that at this point I am personally still leaning towards the fund route for a number of reasons, however, I too have considered real estate, and am very open to any investment (and will be happy to consider this or any other opportunity if someone has more details). Rather I am just trying to play devil’s advocate a bit to help look at the issues carefully and soberly. It’s not completely true that there are no guarantees in life. There are some. But many of them are not what they appear.
Anyway, that’s my two cents (not guaranteed!).