Would you like
to print a copy of this book to read offline? Click Here to download the printable PDF version |
 |
01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
30. Inflation Clauses
In many cases, the long term net lease will have a so-called inflation clause. It provides that if the lessee (the syndicator's corporation in our case) collects rents in excess of a certain sum, that the investors get a part of such excess rents. Read that clause carefully. How much more rent is there to be collected before the investors get additional payments? If the investors were to get an increase when the rents collected by the syndicator-lessee go up by 50% the investors may have to wait a long time before they see a dollar of increased rent. Rents do not go up 50% overnight.
When you see an inflation clause you must first determine what the chances are of collecting higher rent. If there is a sub-tenant with a long term lease at a fixed dollar amount, the chances are nil. If the building is a new luxury development, you may have a question mark when the leases come up for renewal. If you have rent controlled property, your chances in the long run depend on an easing of the law.
Are You Ready To Move Onto The Next Lesson? Click Here...