Buying a Show Home - what should I look out for?

[Hamel]

I've got the opportunity to purchase a showhome, and would appreciate any advice about what any potential pitfalls might be. Ideally it'll be a showhome for a couple of years* The pros look good, just not sure about the cons. I'm a newbie, own my own home, but thats it at this stage.

*If anyone has a copy of a Show Home Lease Agreement that woudl be awesome.

Thanks in advance!

Hame

[Rosco]

Hi Hamel,

What is the gross yield?
What is the overall cashflow with 100% mortgage? What is overall cashflow for you?

My guess is the rental return/cashflow is terrible. So this brings the question of why do you want to buy it?

Ross

[Nick G]

Show homes tend to be tricked out so are expensive relative to the expected rental return.

[Davo36]

Hi Hamel,

What is the gross yield?
What is the overall cashflow with 100% mortgage? What is overall cashflow for you?

My guess is the rental return/cashflow is terrible. So this brings the question of why do you want to buy it?

Ross

This hasn't stopped anyone buying for the last 8 years. It's all been based around capital gains. And the 'investors' have all been proven correct up until recently. I that virtually everything has doubled in value in that time.

So they're still trying to do that.

[Rosco]

This hasn't stopped anyone buying for the last 8 years. It's all been based around capital gains. And the 'investors' have all been proven correct up until recently. I that virtually everything has doubled in value in that time.

So they're still trying to do that.

Agree - and the past few years shows it has worked.

But if you can buy something smart, add value through subdividing for example, get the cashflow even. Then isn't that better and lower risk? If properties jump in value, still benefit! But just not having to prop up the property every week!

Ross

[Rosco]

I like this video, which shows what also happens to a lot of new investors - https://www.facebook.com/theproperty...9594571973849/

Ross