If you have or are thinking of buying investment property, then in this article you will find a great risk control tool. It’s called “Lock in value property equity” and it does what it says – it protects your investment property from price declines yet allows you to keep any gains! It’s a great idea, so let’s look at it in greater detail.
If you are buying investment property you are normally looking to make a gain on your investment and the risk/ reward is crucial to your success.
Of course if you buy at the right time and prices rise that’s great – but if they fall you have losses. You knew the above anyway! But let’s imagine you can protect yourself from real estate value falls and yet still take advantage of all the gains made on your property.
This is what “Lock in Value property equity” does.
A company grants an option to you which gives you the right” (there is no obligation) to sell the property back to them, at the price you locked in” the value of your property at – regardless of how far price decline, you are entitled to the value you locked in.
These contracts can be taken for up to 10 years and you can exercise the option to sell back the property at the “locked in” value, anytime after the first 2 years. While it gives you risk protection, you don’t affect your profit potential. You don’t have to sell the property back to the company giving you the”locked in” price, unless you wish to do so.
This of course means that all the gains on property are yours to keep and if you wish to sell out at a profit, you can sell to anyone buyer you wish. If you are investing in property then you are of course taking a risk and you need to be careful to balance the risk/reward, to ensure long term profits.
“Lock in value property equity” is a contract that allows you to control the risk for a small affordable fee, without affecting your profit potential. This is an essential risk control tool and is becoming more popular with property investors as we see a downturn in real estate values.
As the real estate markets are always volatile and there is always a chance of loss, these contracts will help you control risk and still allow you to take advantage of any upside in the market.
Take a look at “Lock in value property equity” contracts and you maybe glad you did