It’s Noisy Up In Here

Can you hear that noise? It’s the chatter of doubt that plays in your head. It often stops you from taking action; ‘it’s not affordable,’ it murmurs or ‘It’s too risky,’ it says.

One article on off-the-plan rental guarantees in a well-known property investment publication added to the noise this week. A rental guarantee on an off-plan purchase provides surety around post completion rental income (in most cases funded by the developer), in cases where a property is untenanted. The article makes some broad assertions that can be summed up in two key points:

  1. Guarantees are inflated above market figures and thereby provide inaccurate expectations around income post guarantee
  2. Prices are inflated by the developer to fund the guarantee

I’ll concede that there are some developers guilty of the offences above. Making broad statements, however, neglects the more potent upside of rental guarantees.

Our mission, beyond providing you the tools to make informed decisions, is to mitigate your risks. One of the ways we do that is by negotiating purchase incentives that act as insurance by transferring risk to another party. One of those incentives is a rental guarantee. Think of it as insurance against post completion vacancy.

Here’s how we avoid the potential pitfalls outlined above:

  • We negotiate rental guarantees in line with market, not inflated figures. This ensures there aren’t any surprises at the end of the guarantee period
  • In most cases, research approved properties are tenanted within a month
  • Rental guarantees, if negotiated effectively, ensure that developers stand behind their projects
  • We conduct a thorough value proposition to mitigate the risk of a price/value differential

Whatever your noise, education is the remedy.

23rd Apr
Bite-Sized Basics: What is Wall Street?
16th Apr
How property is your life raft from the rat race
9th Apr
The best performing investors are ones who are dead
There are no results to display. Please try a different keyword or reset the filters to see everything.

Subscribe for free property investment advice, resources & education

This field is for validation purposes and should be left unchanged.