Hello, this is my first attempt to communicate this way. We are looking at purchasing a display home. The builders then rent it back for a contracted no of years and at the end release back after repainting for you to re rent or sell.
This deal is in South Aust. and by all accounts gives a positive cash flow.
We are wondering what things we need to consider at this stage . Thank you. Dolphthey usually factor that in the price.
I wouldn’t take up a deal like that.
Byronent
Adelaide SAI would not touch it either. They will use your home to sell the new ones which may in turn devalue your home as the new ones come onto the market – possibly an oversupply!
Then they leave and you have to find a tenant when there are a heap of newer properties available next door.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty LtdYou are buying this place while they are still selling land?
Often the price rise comes when no land remains and people need to buy on the secondary market.
These display homes are often built with better finishes for obvios reasos.
I wouldn’t be too quick to dismiss this opportunity!
All the best,
Simon Macks
Mortgage Broker
http://www.mortgagehunter.com.au
0425 228 985Todays Hot Rate
***3 year fixed – 6.49%***Comments may not be relevant to individual circumstances. If you intend making any investment, financial or taxation decision you should consult a professional adviser.
I was of the understanding that completed homes were being sold. If it is a land sale, you are right.
Robert Bou-Hamdan
Mortgage Adviser
http://www.mortgagepackaging.com.auFREE Finance-Related Newsletter – Click Here
Comments made are of a general nature and should not be construed as individual advice.
© 2004 Mortgage Packaging Pty Ltdthey usually factor that in the price.
I wouldn’t take up a deal like that.
Byronent
Adelaide SAhi dolph
look at this closely, i’ve seen lots of new releases as the development matures with considerable land price increase increments.
that land value increase is money in your pocket.
i’ve also seen a lot of display homes on the main entrance to an estate – lots of future traffic noise and inconvenience – ultimately you need to look at the bigger picture.
i have friends who own an ex display home and it has worked out just fine – and given 6 months every one else has forgotten that it was a display even if this mattered.
cheers
brahms
Mortgage Broker
[email protected]Hi Dolph,
We have just purchased a display home in NSW. Our aim was not for investment rather as own occupied upon the end of the lease back.
The deal is quite good. The rent is 5.5% of the purchase price. All outgoings such as council, water and community title rates are paid by the builder during this lease period.
The other guys are right, land/ house packages are currently being sold. Until that is finished our lease will continue.
The things you must look out for are :
1.” insurance” this can be costly as most insurers do not like insuring display homes due to public liability and having no one occupying the home at night ( higher theft risk)2.If your home is to be mortgaged, your mortgagee may need to sign a mortgagee’s deed depending on what type of agreement the builder has with the display village.
Other than these complications we encountered so far, all is going okay… and lastly we are just waiting for the lease to end so that we can move in.
Best to check with your accountant and solicitors relating to all the nitty gritty parts of the contracts and lease!!
Meanwhile good luck!!
Is the house in a display village? How secure is the builder as a tenant? If the house is in a display village and the builder goes broke, I believe you can’t lease it to a residential tenant until the village life comes to an end (they have a limited life – Council can tell you what it is).
These can be a good buy if the builder needs the money but still wants the display home, however just check out the above.
Shar
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