The Jovand Group has a number of display homes currently for sale.The display home has several advantages for investors:
- The house tends to be top quality because it’s designed to show the best the builder has to offer the buying public.
- The house will be kept in good condition because it’s the builder’s show home.
- The builder will lease back the property at commercial rather than residential rental rates, providing a much higher return than is normal for houses.
- The lease will run for one, two or three years, sometimes longer.
- The builder tends to cover most of the outgoings, such as insurance.
Display homes offer a range of extremely tempting advantages, from guaranteed rent for a set period, to high yields of around 7% pa, as well as reliable tenants with a vested interest in keeping your property ship shape.
Display homes represent an excellent opportunity for investors and are highly regarded as a prized addition to any investment portfolio.
How it works
Builders will usually look for a display home site where the action is, in a quality development with access to a large number of blocks of land.Lease-back option is when you purchase the house and rent it to the builder for anywhere between 12 months to five years. The builder uses the house as a display home and in return pays you as the owner a fixed rent. The rent varies but is generally higher than what you would earn renting the property to a tenant on the normal rental market.
Because it’s such a large investment, we maintain it as a display home for a minimum period of 12–24 months .Sometimes we will also write extension options into the lease-back agreement to enable them to extend. This may be for another 12–18 months.
Until then, one of the major incentives for investors is the promise of a high quality tenant who will treat the property with the utmost respect, because it’s in their own best interests to do so. It’s guaranteed that you’ll always have a very good tenant in there.
For an investor, having a builder as a tenant is ideal. The property will be maintained in pristine condition throughout the tenancy, and when the home is handed over it will be in ‘as new’ condition.
The quality of the finish is a major draw card and, by their very nature, they’re there to attract buyers to a new development – after all, display homes tend to be of the highest quality.
Our display homes are constructed to the highest standards and all inclusions and fittings reflect the quality that’s expected of such a home, and in most cases will include a number of upgrades that all add to the appeal of the home.
The fact that we take care of all maintenance and there are no agents fees charged, together with the higher rate of depreciation that a new home brings, all make display homes very attractive.
And of course the other major incentive is the guaranteed high rental yield. A return of up to 7% pa for a residential investment is excellent. Most residential property will show a much lower return, plus in this case, there’s no maintenance issue. The rental is guaranteed for the lease period, and in many instances the lease may be extended subject to the life of the display. After hand over, the investor will have a home suitable for re-leasing or, as many investors do, moving into.