These Are 5 Traps Developers' Set To Attract Home Buyers

2) Guaranteed rentals return

Guaranteed rentals are mainly offered to investors who seek rentals on regular basis from the property they are investing in. This means, on signing the contract, buyers are suppose to get an annual rental income of around 6-12 percent of the total value of the property; as developers guarantee. Sometimes, developer offers a few quarterly post-dated cheques to reassure buyers of the accuracy of the scheme. However, the developers hold the actual possession of the property during the contract tenure and then they put such properties on lease to clients including financial institutions, banks, corporate and so on.  The scheme offers free maintenance of the property.

What’s the trap?

Usually developers launch such guaranteed rental scheme when they face cash crunch situation. And, if developers fail to generate adequate cash flow then there can be a high risk of check bounce; the post-dated cheques which developers provide at the time when buyers sign the contract. "It doesn't seem feasible for a developer to offer rental returns as high as 12 percent because he has to bear the maintenance costs. So, you must ensure that no hidden costs are included in the purchase agreement. A rent that is 4-5 percent of the value of the property is more credible and a good return," says Kapoor.

Read More: A Peek Into The Homes Of Rich And Famous