Some property developers guarantee certain rental returns. Can such guarantees be trusted?
The promise of a guaranteed return should be viewed with caution, as returns are subject to the market situation, which nobody can predict accurately. Another question is, what is actually being guaranteed. Some developers offer a net return, others offer a gross return or a profit sharing scheme. The latter is very difficult to control. Especially first time developers are often not in the position to calculate such a rental guarantee and the tax issues related to it. If a well known management company offers the guarantee, chances are that they can deliver. If you have doubts about those promises, decline the offer and ask for a price reduction instead.
