Rental Guarantee ??

[Kalou1972]

Can someone please confirm how rental guarantee works??

If I am promised a rental gurantee of 8% for 3 years. Is it correct that the management company takes the management fee out of the 8% they give us??

I thought that the management fee came from whatever rental they got for the place and we got the 8%??

Can someone please advise?

( Sorry Richard....just like a second opinion!)

Thanks

KAren

 

[chriscross34]

Hi Karen, it depends on your contract. IPI are developers of the Marsa Alam Beach Resort. I have opted for a 2 bed roomed apartment and chosen their 5 year rental guarantee. In my contract if i choose the rental guarantee, I receive 6% in the first year of the original purchase price (excluding furniture pack). Whilst under the guarantee, the developer pays the maintenance cost. If there is a management fee, they will have already taken this into account in determining the percentage they are offering in my case.

If a developer is offering 8%, they should make clear in your contract with them any management fee or others fees that you must pay and any fees that they must pay.

I would imagine it would be preferable should there be a management fee, that they deduct this from your gross rental in order to reduce any income tax liability.

From what I have read, I am not familiar with any companies offering a rental guarantee then charging a management fee, normally this is already factored into the percentage they give you.

Chris

 

[Alan Cockayne]

Hi Karen.

Chris is correct. His contract may have accounted for the rental management fees plus the complex/resort management fees that everyone pays = 6%

Yours may be 8% for 3 years if you agree and sign for it. But make sure what the management company actually does for you in their services.

I remarked about insurances in another thread. Do you have it? Is it part of the fees? What happens if tenants wreck your place? Who replaces the contents?...... All these things should be taken into account, you can't just think it's all profit.

Marsa Alam Beach Resort is a top hotel and complex, which uses client properties for their guests. Not all residential complexes are as rentable. Be careful in handing over right of use to anyone who has no track record.

Alan - Coralife-Style Consultants.

 

[ERG Experts]

Can someone please confirm how rental guarantee works??

If I am promised a rental gurantee of 8% for 3 years. Is it correct that the management company takes the management fee out of the 8% they give us??

I thought that the management fee came from whatever rental they got for the place and we got the 8%??

Can someone please advise?

( Sorry Richard....just like a second opinion!)

Thanks

KAren

I think the other two posts have answered you well, but I just wanted to add that generally each resort offers a different system. Check with the agents or developers and check the contracts. It should normally be that you will be guaranteed, in this case 8%, pa and any other costs, management fees, maintenance fees, utilities etc, are paid for separately.