Hi everyone, it’s Glen from 21st Century Group, constructions, investments, property management.
One of the topics that I want to talk to you today is about rental guarantees.
The reason I want to talk to you is because just yesterday I saw an ad where, to put it bluntly, it was a marketing company giving their investors, you know a three-year rental guarantee.
Now, do you need a rental guarantee? Absolutely not and let me tell you the reason why.
To start off with, when I’m talking to an investor one of the questions that I always ask them, and if I don’t get the answer I don’t move any further
is, “How much can you very comfortably afford a week towards the investment?” That’s a given right.
So some folks might say $100, some folks might say $200, some folks might say $150,
$250. Whatever the case might be, I write it down. I write it on the whiteboard. Okay. So they see that.
When you do your sums and this is quite important.
Right? And let’s say as an example, you do your sum, the property rent is $450 a week. Do it at $400, drop it by $50 bucks. Now you know you can get $50 more right. But drop it by $50 and see that you don’t eat into how much you can comfortably afford a week. It’s as simple as that. All right? Also when you do your sums, you need to take into consideration if there is not going to be a tenant two weeks, three weeks, four weeks. Whatever the case might be. Now, you will not have a tenant more than that, if the location is great, so if the location is great you will not have a problem, getting a tenant. And also keep in mind rents can fluctuate, all right? So in a certain time of the year, you might get your $450, but let’s say the tenant moves or leaves. To get a tenant quickly you might have to drop it by $10 or $20 which is fine. Right? The reason being is don’t forget when the sums were originally done, we dropped the rent by $50 and at that time you were happy that it wasn’t eating into this $100 or $200. And please folks, it’s extremely important that even if you are let’s say positively geared,
To take the $100, $200, $250 and put it away. Okay. Now a good mortgage broker, and I’m not a mortgage broker, can also show you
how you could use the rent and tax deductions to reduce the interest on your own home mortgage. But that’s a different topic altogether. Your mortgage broker can talk to you about it. All that I want to do is talk to you about rental guarantees and really you’re paying for the rental guarantee. If they say that you are not, I’ve been in this industry for over 27 years,
so I know what I’m talking about. Right? You are paying for the rental guarantee, so if you want to know more about it, just email me or give me a ring and let’s have a bit of a chat. So my name is Glen 21st Century Group, constructions, investments, property management. Well this will be going on Facebook and Instagram and whatever Linkedin and I don’t think Instagram. Okay. And our website. Give us a thumbs up, like us and I’ll have a chat with you soon. Bye for now
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