Rental Property FAQ's

Frequently Asked Property Investment Questions

Q: While the house is being built are there progress payments?

A: Yes. The bank will charge interest on whatever money they have paid out, either to the builder or to settle the land, this interest will either have to be paid by you or the bank may agree to add it to the loan.


Q: Am I able to make changes to the house design & the colour scheme?

A: No. The aim is to keep the price of the house as low as possible and offer you the best possible guaranteed rent return. Not allowing changes helps us achieve this, also we know what the majority of tenants are looking for in a rental property, allowing changes may make it more difficult to lease out the property to a tenant.


Q: If I pay the extra and have the luxury items included in the house, is the guaranteed % on the total price including the luxury items?

A: Yes.


Q: Will I receive rental statements during the guarantee period?

A: Yes. Each month they will transfer your guaranteed rent into your nominated account & email you a statement. At the end of each financial year they will also email you a financial year statement. If you do not have an email address they will post the statements to you.


Q: Can rates be  payed  out of the guaranteed rent money?

A: No. The system is set up that they will receive the rent money from the tenant, they will then pay all the guaranteed expenses from the rent monies received, they will then make up any short full & then transfer the guaranteed amount into your account. Therefore paying expenses that are not covered by the guarantee such as council rates, water rates, building insurance, land tax & body corporate fees if applicable, will complicate matters. However they can assist you in setting up a direct debit with the relevant authorities.


Q: What happens at the end of the guarantee period?

A: A few months before the guarantee period ends, they will contact you to ask what you would like to do. You may wish to (i) Sell the property, (ii) Continue to lease out the property, or (iii) Move into the property.


Q: How can they afford to give such a guarantee?

A: When a real estate agent sells a property they are paid a commission, they use that commission to offer you this rental guarantee. They receive rent from the tenant occupying the property, from that rent they pay for the expenses listed in the guarantee, including paying themselves a normal management fee, they use the commission to make up any short fall and pay you your guaranteed amount. Even if the full amount of that commission is used, they still received their management fee and you have had 5 years of hassle free investment with a great rental return.


Q: Why offer such an inclusive guarantee?

A: They want their investors to have an absolutely hassle free and happy experience. If you are receiving a great rental return and enjoying being a property investor, you are more likely to want to buy a 2nd investment property with this guarantee and then a 3rd and so on. This guarantee makes it easier to hold the property, allowing you to consider purchasing another property sooner.


Q: What happens if the rental amount increases substantially and there have been minimal expenses to pay, during the guaranteed period, and they end up receiving more rent than they have paid you?

A: At the end of the guarantee period, you receive a statement showing the total rent they have received less total expenses they have paid. If that net figure is greater than the rent they have paid you, they will pay you the difference. If that figure is less obviously you do not refund any amount back to them.


Q: Does the rental guarantee amount increase during the guarantee period?

A: No, rather than paying a lower return at the start & then having increasing during the guarantee period, they pay a high return right from the start & the rent amount is fixed for the 5 years.

 

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