Do not believe -- do research.
Goldberg Global,
The problem is not with rental guarantees. These often can be worked into the prices of the product. It is what happens after the period of the rental guarantee that is important. What will the investor get two, three or four years down the line. If an investor recieves a 12% rental guarantee, but the market provides for a mere 6% the investment is a poor one. First, the client financed the rental guaurantee in the purchase price. Second, the expected future income will not be forthcoming.
In this case the contract may be fine and the developer may abide by all the terms of the contract, but in reality the client is getting short changed.
This means that before buying a rental property, do not look only at the rental guarantee but also at the local market. The main question should be: Does the local market support the develoer's claim at present? Is the market a trend or seasonal market or is it a stable market? -- What is true today, may not be true tomorrow!
|