I am interested in learning about wraps in general. But are they still a worthwhile strategy in a flat market? From what I understand, the rising prices in a boom market make it far more attractive to a wrappee, as they would have a chance to recoup the initial margin placed on the price of the property.
Can anyone clarify this for me?
Thanks
JJ
JJ & Jo
Wrapping in the current market gives you a great opportunity to maximimse returns. As you mention in a rising property market the wrappee get the benefit of any capital growth over and above your installment contract price or loan balance.
In a flat market they are likely to stay with you longer as it takes longer for the property to increase in value and therefore you reap the increased loan repayments.
As wrapping should be considered as a long term cash flow business rather than a get rich quick scheme the current market is ideal to consider your first wrap property.
Cheers Richard
richard at castlewhite.com.au
Email me for details of our Qld wrap service.Richard Taylor | Australia's leading private lender
JJ&JoI have been asking myself the exact same question!
I would say it IS possible even in a flat market but it will come down to how you structure the wrap deal.
If you are looking a short term (5 year) wrap, be sure to identify an area with reasonable growth to ensure your wrapee finishes in front.
If a long term wrap (up to 25 years) the growth is less of an issue – as Richard has said its really to be viewed as a long term proposition.
BTW I would suggest Steve’s Wrap Kit as an excellent starting resource – Im working my way through it currently and it answers a lot of questions!
Hope this helps!
Cheers
PeterM[cap]There are always desperate purchasers out there!!!
Robert Bou-Hamdan
Mortgage Adviser
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