24. Will You Share in the Growth of Your Investment?

We have seen that there is an excellent possibility of growth in real estate. But what is important to you is whether you are going to participate in that growth. You may think that if the property is carefully selected, bought at a fair price, in good condition, in a good loca­tion, and well managed, and if past development is a yardstick, the property should increase in value over the years. Right you are. Now you are tempted to say that if the value of the property goes up, of necessity the value of your share in the syndicate goes up too. Unfortunately, you are mistaken.

Whether you are going to share in the growth of the syndicate depends to a great deal on the provisions of the partnership or other business agreement which you will be required to sign. This document determines whether and to what extent the growth factor has been preserved for you. In view of the continuous inflation, in view of the necessity of having your investment earn an ever larger number of dollars just to preserve your purchasing power, it is of the greatest importance to you to ascertain whether you will participate sufficiently in the growth of the venture in which you invest. The question which you must ask is: "If the value of the building increases, will my syndicate participation also increase in value?" We will tell you what to look for in the following chapters. But before we do that let us see what makes a building increase in value.

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