Display Homes: Why they make great investments
How do you get a great return without all the hassles associated with a run of the mill investment properties? A two storey display home in Perth could be the ideal option for investors looking to sit back and watch their property work for them. Display homes are a fantastic option for the savvy investor - but what makes them such great opportunities?
The perfect tenant
Every landlord dreams of that perfect tenant. The one who pays more than market rate and never complains. A tenant that won't cause any maintenance issues or get into trouble with the neighbours. Someone who really looks after the place and treats it as if it were their own.
Well, a display home could be the solution. Buying a house that is part of a display village allows you to lease it back to the builder who then uses it to showcase their product to the vying public.
What makes this situation so ideal is that the home is kept in tip-top shape for display purposes, so you know it is being looked after. You also don't need to worry about any period of vacancy as the builder is a guaranteed tenant for the life span of the display village. This is usually around a year or longer.
The builder not only rents the property from you, but they pay a commercial rate of 6 per cent. However, when it comes to your tax liabilities this property is treated as a residential rental - talk about a cash flow property! You may even find that the excess cash is sufficient to fund the deposit of another purchase by the time the lease period expires.
When builders show potential customers a display home they show them the best of the best. This means fully landscaped gardens and beautifully presented outdoor areas, as well as an exceptional level of finish inside. Display homes are only open around 15 hours a week too, so you don't need to worry about wear and tear on the property.
But what about the neighbouring homes? In a display village the level of spec is uniformly brilliant, meaning you're buying into one of the classiest areas around. This means that when the display village has run its race, the beautiful high-spec homes that remain will attract the best owner-occupiers and tenants possible.
Superior fixtures and fittings will also help you to command a rental premium compared to similar designs of lower quality.
Reaping the rewards
If you've been in the investment game for a while, you know there are certain hassles that come with the territory. Well, with a display home in Perth, these are largely eliminated.
Property manager? There's no need for one for as long as the builder is your tenant, increasing your cash flow further. And don't forget depreciation can be claimed on this asset too - now you're really making the most of it!
The home will be kept to an immaculate standard, usually professionally cleaned twice a week. And if you've really fallen in love with the presentation of the property, you can even purchase it as a package including the furniture and fittings which are handpicked by an interior designer.