Guaranteed rental return (GRR) schemes are highly attractive options for property investors. However, the promises can sometimes result in the wrong choice being made.
Being promised a guarantee 7.5% rental return every year will immediately set off one’s internal calculator and the thought of getting some RM1600 per month sounds very attractive indeed. However, we should rather think what happens after few years of high returns? What types of return can we expect for the subsequent years if things going in unpredictable way? It is important to understand that buying a property is for the long haul and is crucial to ensure the long term viability of the purchase and not be distracted by short term gains.