Have you ever thought a guaranteed rental income for your investment property would be too good to be true?
If so, you're not alone.
For 35 years Dwyer Property Investments has offered a 3-year rental guarantee on all our properties. And even before the coronavirus pandemic, I was being asked how it is that we can possibly offer a guarantee. “What’s the catch?” people would say.
So today I am writing to explain why we do this and how it’s possible.
Some people think we might be funding it from an inflated selling price. I can easily put this one to rest by showing you our sale prices and comparing them to other high-quality builds in comparable areas.
The other thing people say is “it just sounds too good to be true - How can I be sure that I don’t pay for this in the long run”
There is no real secret to why we can do it, so let me explain:
I only have to pay on the 3-year rental guarantee if the property does NOT rent out. But they do rent out, and I am confident they will continue to do so.
And this is why:
First, my brother builds the houses. And he builds them well. Which means I can be personally assured of the quality of the product in the market. Which in turn means, I know a Dwyer house will always have an advantage in a rental market. In other words, if a renter is looking at 2 properties, and one of them is a Dwyer property, I already know I have the edge.
Rentals in the area have simply not changed much with annual growth of just over 1.1% growth per year. And that is total Australia and the Sunshine Coast has one of the lowest rental vacancy rates in Australia (0.4%) so I know renting them out is no problem.
While the media writes a lot about a rental fall for apartments in Sydney, the facts on the ground here in South Eastern Queensland are different. We are already seeing signs of INCREASED rental demand in our pocket of the world.
It’s understandable - our properties are located in places people really like to be - in both the short and the long term.
So, my conclusion is, all in all, rents are more likely than not to remain very stable in South East Queensland.
So why do I need to offer you a 3-year rent guarantee at all, then?
Simple. It takes some of the risk away from your initial investment property. Which in turn makes our properties a more attractive proposition for you as a prospective investor.
In the same way a fixed interest rate can take some of the uncertainty out of repayment cash flow planning, knowing that DPI will underwrite your rental income if the property failed to lease will put your mind at ease.
First-time investors, in particular, appreciate this peace of mind. It makes it much easier for them to get their head around making their first investment in property.
And that makes it easier to do my job.
Even though I take on a little risk making this commitment, I think the risk is low (for me) and adds a lot of value to buyer and investors.
For more information on how our rental guarantee works, click here.
Stay safe out there,