A Beginners Guide to Real Estate

Choosing a display home for an investment property

11 May 2016 by Jerome Young

Display homes can be a great investment for property investors, coming with a top line range of fittings and guaranteed rental return. Additionally, there is the prospect of strong capital growth once you eventually sell the home back to owner-occupiers or other investors once the building company is no longer using the house as a display home. 

Here are some things to look for when investing in display home. 

Structural soundness

Display homes are often finished in the highest level of fittings and immaculately styled so that they are very tempting to inspect. However, you also need to evaluate other important liveability aspects - such as whether noise from an upstairs bathroom or living area is heard in downstairs bedrooms as these will likely be very important to your eventual home buyers when you sell. Equally, it's important to check whether the layout is optimum for the lifestyle of your prospective buyers - as a first home buyers home will probably be targeted towards a young family and need more smaller rooms while a luxurious larger house might need a teen retreat and a home office. 

Rental agreement

The rental agreements for display homes tend to be a little different as they offer much more flexibility to the tenant to make changes and display the home in different ways. The house may actually be in much better condition generally at the end of a tenancy compared to a normal tenanted properties. The plumbing and wet areas are not used as much, but there may be much more foot traffic through certain areas such as the hallways. You can always look over the agreement and negotiate to get floor coverings changed out at the end of the tenancy or any other changes that would be needed to make the property either rentable or saleable at that time. 

Area fundamentals

Display homes tend to be built in new estates and any future capital growth of the property relies in part on the area. It's important to look at the committed facilities in the local area including public transport, shops, schools and parks. These help make the area a more interesting and vibrant place to live, and as a result drive up property prices. You can also look at trends in land sales in both the estate that you are looking to buy in and any surrounding estates to see if it's a popular and growing area or if sales seem to be slowing down. 

Display homes are a popular and profitable way to invest in property with the guarantee of a stable tenant who is passionate about keeping your property looking as good as possible while they are there. Why not talk to a real estate agent today if you are looking to invest? 

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