Dream Come True OR Too Good to Be True?
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GUARANTEED RENTAL RETURNS
Dream Come True OR Too Good to Be True?
Guaranteed Rental! It certainly sounds like a dream for every investor. But how guaranteed are you and is it exactly what you need? As with every investment, it’ s better to arm yourself with all the details before jumping right in.
words by Property Hunter
What is a“ Guaranteed Rental Return”? A Guaranteed Rental Return, or better known as GRR, is a future rental income that is guaranteed by the developer or management company to the property purchaser for a contracted period after the purchase agreement is signed. In simpler terms, it’ s an auto rental when you own a property. Sounds too good to be true, you might say?
GRR needs to be considered amongst many other factors that determine whether an investment is of good value or not. This will help the buyer consider the objectives and investment timeline, which varies from individual to individual.
1. The investor should be cautious if there are no paper promise or an actual contract to protect the buyer should the income not be generated.
2. The investor should study the current market of their chosen property and monitor to see if the income figure is realistic and achievable.
3. To ensure that the developer does not inflate the property price, the investor should ensure that the developer has the ability to manage the property adequately for the income to be generated.
Source: PropertyGuru. com. sg
Robert Gavin, CEO of Property Horizon gave three points to refer to when considering buying a property with GRR. www. PropertyHunter. com. my 31