Found a display home site offering a 2 year lease on a display home with a guaranteed 8.3 % return plus they pay rates water. There is also an option to extend for a further two years. Is this the norm? Or are there hidden traps that would make it seem not so attractive?
Ollie
Email MeOne consideration would be finance as many significantly reduce the lvr on a Display Home whilst others won’t lend them at all.
Just make sure what you are paying is market price and not an inflated figure built around the yield.
Also check what it will rent for in the local market when the builds moves out.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
You are looking at max 80% LVR for finance.
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
Thanks guys, was considering moving into it when they leave.
Ollie
Email MeStill not going to help you with the finance part.
You would be able to go to 85% but no higher.
Cheers
Yours in Finance
Richard Taylor | Australia's leading private lender
Be sure to check on the insurance situation. Might be treated as a commercial venture.
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
Generally the main issues people find with display homes is LVR restrictions + insurance issues. Not to say they are all lemon deals, but there certainly is a reason why the yields are provided as high as they are.
Some of the deals I’ve seen with them however have ‘make-do’ clauses, where they repaint, refit carpet etc too at the end of lease, as some of these display homes are incredibly worn by the end of their terms.
Corey Batt | Precision Funding
http://www.precisionfunding.com.au
Email Me | Phone MeInvestment Focused Finance Strategist - servicing Australia-wide
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