In order to showcase their best work to the public, home builders have to maintain clusters of display homes in various locations. These displays cost capital. To help offset those costs, builders often put them up for sale as soon as they are ready for display.
Display homes for sale are located in some of the area’s best suburbs and estates. Most come professionally styled and fully kitted with the finest finishes, floor coverings and landscaping.
There are two main reasons to purchase display homes:
- To live in: display homes are built to impress buyers by showcasing a builder’s best work. Therefore, display homes typically come with superior quality materials, workmanship and extras.
- As an investment: as investment properties, display homes come with premium features, a guaranteed rent return of around 8%, perfect tenants and meticulous maintenance (including interior cleaning and exterior landscaping).
Living in a dream display home
Purchasing a display home for your own family to live in is a delight. A number of recent display homes for sale in Victoria, for example, come pristinely maintained for the duration of the display period.
In addition, buyers can enjoy luxurious perks like reverse cycle air conditioning, a full battery of high-end kitchen appliances, a fully landscaped garden, a swimming pool and plenty more.
Even though these homes are not technically ‘brand new’, they are pretty close. Most have never been lived in, showing very little wear and tear. In addition, the builders will fully manage home and garden upkeep, meaning that it will look like new until the end of the display period.
Also, most display homes (such as some great display homes in Perth) are located in suburbs that are very popular with home buyers. This means living in an immaculate dream home in a prime location. These neighborhoods all have good reputations, low crime rates and excellent facilities (schools, markets, parks) nearby.
Benefits of living in a display home
- Pristine maintenance: guaranteed maintenance by the builder, for the lifespan of the display village (usually a maximum of five years). In many cases, this includes indoor cleaning and outdoor landscaping.
- Premium quality: expect the highest quality build, finishings and exterior, since these are made to showcase the builder’s best work.
- Great neighbors: display homes tend to attract quality tenants paying premium rents.
- Easy upgrades: buyers often offer the option to purchase the furniture in the display home. This can furnish your home with premium art, furnishings and accessories that were selected by professional interior designers.
Purchasing a display home as an investment
In western Australia, a large number of buyers are getting switched on to the benefits of purchasing display homes.
These homes typically come with a lease-back option. This means that you purchase the house and and then rent it back to the builder for the life of their display village (usually between one to five years).
Builders don’t live in the homes, but continue using them as display homes while paying the owner a fixed rent. In general, rental rates in display home areas are higher than what you would receive renting to regular tenants.
As a result, you will enjoy a great return on your investment during the lease period, as well as the security of a long term tenant. You will also have all maintenance issues taken care of during the display period.
Benefits of purchasing a display home as an investment
Buying display homes for sale and leasing them back to builders is one of the highest yielding investments accessible to Australians today. With returns as much as 8%, display home investments can offer as much as twice the returns of traditional investment properties in the current market.
In summary, purchasing a display home as an investment yields many advantages:
- High rental returns throughout the leasing period
- Your property is surrounded by pristinely-maintained display homes
- A wide swatch of locations in premium parts of Victoria, New South Wales, Queensland and Western Australia
- Likely to attract quality tenants paying premium rental fees
The current market in Australia is definitely a buyer’s market – don’t feel pressured to close a deal too quickly. It is important to keep in mind that the builders you’re negotiating with have a lot more experience than you do.
To overcome that disparity, it’s helpful to connect with a reliable real estate professional. They can neutrally walk you through negotiations and help you when making investment decisions.
If you take the time to do the research and put in the effort, the payoff will be a gorgeous new home with appreciating value that will become your pride and joy – and the envy of your family and friends.
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