If you’ve ever shopped around for a new house, then chances are good that you’ve seen your fair share of display homes. Perhaps you were even so impressed that you thought, “I wish I could just buy this one.”
Well, it turns out that you can, and it’s actually very common. Builders don’t want their capital tied up in display homes, when they could instead use it for new projects. This is why many Brisbane home builders often look for investors to purchase their display homes, especially for almost sold out developments. They then proceed to lease back the property until the time comes that they no longer need it.
This is a mutually beneficial arrangement; display homes are very popular among real estate investors due to unique advantages. Here are a few:
- Top quality – The display home is very likely the builder’s absolute best, since it’s what they use to demonstrate their skill and expertise to the public.
- Lower cost – Compared to buying a comparable luxury property, display homes are significantly more affordable. Builders will often price luxuries, such as high quality carpeting, at cost. They can afford to do this because they will often write these off as marketing expenses, and they want to free up capital quickly.
- Guaranteed occupancy – Buying a display home almost always comes with a guaranteed period of tenancy. The builder will lease the property from you for a period ranging from several months to a few years, which means you don’t have to worry about vacancy for that time.
- No maintenance – The builders have a vested interest in keeping the display home in a clean and excellent state for the duration of the lease. You can be confident that when it’s over, you’ll receive a property in near perfect condition.
- Flexibility – Once the builder’s period of tenancy is over, you have several options on how to proceed. You can move in yourself, sell the property for a profit, or lease it a premium rate. At times, the builder will even opt to extend their lease for various reasons.
Do note that display homes aren’t perfect. They carry their own possible disadvantages, which depend heavily on the specific builder you’re dealing with. Some builders rush the construction to start selling as soon as possible. Other display homes might have construction flaws, since the builder is testing out new plans and designs for the first time. Always take a closer look to find any possible problems.
If you detect any flaws, that doesn’t mean the deal is off. Remember that everything is negotiable. The builder might agree to repaint the walls, or replace the carpet for free at certain dates, for example. There’s definitely no harm in asking, and it can make sure that you’re getting the best value for your money.