CASE STUDY: OVER RENTING

Another classic.  An investor purchases, unconditionally, a small factory which is leased to an apparently successful Lessee who not only pays the rent but also all property outgoings.  SOUNDS GREAT.  However when the investor went to his bank to finalise the transaction the property was valued by a Bank Valuer who assessed the rental at a far lower figure than the Lessee was paying.  As a consequence the investor had to provide much more equity than first thought which affected his capital outlay and also his return on capital invested and the long term value (and capital gain) of his investment. 

BUYERS ADVOCATES CHECK THESE MATTERS.