rental guarantee

Many rental guarantees are financed by inflating the price of the property, i.e., you pay extra for the guarantee.

The guarantee is only as good as the company that guarantees it – often a $2 company that is only interested until all the houses/units/townhouses are sold. If they go broke then your guarantee is worthless.

The guarantee is often an inflated figure that you have no chance of matching once the guarantee runs out.

Check the price carefully to ensure you are not paying extra for the guarantee. Check also that the guaranteed rental is realistic, i.e., market rental.

There have been cases in Queensland of properties sold with a rental guarantee being left vacant for the entire period of the guarantee. Yes, the owner gets his/her rent, but it is merely a refund of the overinflated price paid initially.

Would you buy the property for the same price without the guarantee? Will the vendor reduce the price if you forego the guarantee?

And run a mile from “cold calls from interstate”. If the deal was any good then there would be plenty of local buyers snapping them up.

We have seen it all here in SE Qld – it is called two-tier pricing – one price for locals and $20K-#30K dearer for interstate buyers. I still see suburbs that are far from desirable being flogged interstate, with rental figures that no local would believe.

Be very wary – the phrase “don’t touch it with a bargepole” springs to mind.
Marg