Should I Trust a Guaranteed Rental Return?

Treat any guarantee as a contract and credit-risk question, not a marketing percentage. Identify who guarantees it, for how long, what conditions or deductions apply, whether the price has been inflated, what happens after the guarantee and whether the guarantor has the resources to pay. Obtain independent legal and financial review and compare the property’s underlying market value without the guarantee. Do not treat projected occupancy or yield as guaranteed. Confirm current licensing, development rules, tax treatment, management costs and actual comparable performance before relying on a rental plan. Model conservative income, full operating costs and periods of owner use before relying on a return estimate.