With any investment it's crucial to look beyond the headine figures and take the time to "look under the hood" as well. This is very much the case when it comes to Property Bonds.
The key players you should expect to see in a good property bond offering are:
A capable, experienced property development team with a strong track record of successful projects of a similar nature.
A legal team to:
- Draw up the agreement between Bond Issuer and the developer, and the agreement between the Bond Issuer and the investor.
- Operate the Escrow account and ensure that all funds transferred between it and the developer are secured by developer’s assets.
A specialist administrative team to manage the payments to investors.
A Bond Issuer company with a strong track record of successful projects to:
- Act as the intermediary between investor and borrower.
- Independently represent the investors’ interests.
Some property developers with little or no understanding of investors needs, will try to do most or all this in-house usually cutting plenty of corners in the process. When you see this, run for the hills.
Learn how to spot a good-looking property bond, and those to run away from. Download our bonds guide today: