A Waikato couple wanted the quality and low maintenance of a modern, brand-new house as a property investment and chose to become the owners of Generation’s latest show home in Cambridge. Experienced property investors Lucy and Steven Christopher are pleased that they heard about the option of owning a show home, as it combines the commercial and residential markets into one investment.
The couple live with their school-aged family in the central Waikato region and has witnessed the population and housing explosion in the area in the last 15 years. They both work locally and have chosen to invest in their community through residential and commercial property. Lucy was relieved and absolutely delighted with the outcome when the expert Generation Homes design team took care of all the interior decisions for the Cambridge show home in Rose Leigh Drive.
“I don’t know if there are other people like me that want to experience building a home, but don’t want the stress of having to make any of the colour and design choices for it,” Lucy jokes!
The Vista design of the home features four spacious bedrooms, open plan living with a galley kitchen and scullery, an aluminium louvre off the dining room which leads to alfresco entertaining on the deck and boardwalk and luxurious bathrooms.
Additional characteristics of the home include a striking exterior, a fully insulated garage with carpet, attic storage with ladder and lighting, an alarm system and ducted air conditioning controlled by Wi-Fi for year-round comfort.
LUCY
We were trying to buy a rental property for a while, but the existing properties we were looking at were about the same price as a new home. However, they weren’t double glazed and had larger sections to maintain. We could have bought an older home, but with all the healthy home standards and things, it’s a little bit riskier and you never know what kind of tenants you’re going to get, either. The net income received might not be as good as a new build and you’d have an old, leaky home that will need repairs. For a little extra, we could get a brand-new home.
LUCY
It was great. Having witnessed friends and family experience significant delays during their own house building projects, I was concerned about the potential for setbacks. I was therefore very pleased that my build was completed efficiently, with only four months from slab down to receiving rental income.
LUCY
With the show home, there was a guaranteed tenant. So, you’re not going to have to worry and be paying a mortgage on something to wait for a tenant – everything’s pre-agreed. Also, you don’t have to worry about problem tenants.
The agreement is for a year, with the right of renewal for another year. That’s attractive, too.
With a show home, a building company is your tenant. If anything goes wrong, you’re in capable hands. There’s a Master Build guarantee and they’ll get it fixed. It’s also their office, so that’s an additional incentive. Having that maintenance side of the investment taken care of so easily is desirable.
It’s a nice balance because you get the capital gain of a domestic property, but you get the commercial tenant – a good mix, I guess. It just made sense to us.
LUCY
The good thing with a show home is we don’t have to have a property manager because it’s essentially a commercial rental. If we had to pay for a rental property manager to look after it there would be additional costs deducted from the income. With a show home, you’re not losing 7% of the investment income to a property manager.
When Generation Homes moves out, the house is going to be redecorated like new, and we can then choose our next step.
With a brand-new home, its value should be solid irrespective of the fluctuations in the property market. At the end of the lease agreement, we could sell it if there is a decent capital gain and the two-year bright-line test is met. If property prices are stagnant, then we’ll keep it as a rental for a family.
LUCY
I hadn’t done any research into it. It hadn’t crossed my mind. I’ve never wanted to build a house, so I’ve never investigated building companies. We were thinking of investing in a new build this time and I saw the Generation Homes advertised on Trade Me. When I saw the price, I thought they were in our budget.
We know Generation Homes Central Waikato Operations Manager Scott Duncan from our ante-natal group and are friends, so I contacted him to find out about new builds. He mentioned the show home opportunity and sent us some information about investing in a show home. We thought that looked good and went from there.
LUCY
I have not seen a more beautiful lawn in Cambridge! I get comments on the lawn all the time. Honestly, that’s what all the people who know we own it have said, ‘How did they get that lawn?’
Generation Homes is very responsive to any questions I have about the property. For example, recently I was wondering about who had the responsibility for the water rates.
LUCY
Yes, definitely. When this agreement concludes, if there’s a chance to sell it, we could reinvest in another show home and keep doing a show home cycle. I now know that there are people who do show homes as investments and then they continue to just do show home houses as investments.
LUCY
It’s been good for us. I’d recommend investing in a show home if you’re looking at all your options.
I don’t think people realise you can invest in show homes. I always thought that the building companies would build the houses themselves. I didn’t realise they got investors to fund it. If people are always looking for existing properties as rental properties to buy rather than build, they probably would never stumble across the show home investment as an opportunity. There’s a lot of good about show home investment.
By sharing our experience, I’d like people to understand that property investment is achievable when you are younger. You don’t have to be in retirement – it is within reach.
LUCY
It was great that the show home build included some complimentary upgrades within the design. It is a very high-spec home, and we got a discount on that. We’ve got a better-quality home than we would have had if we had just bought an existing property.
For example, there are curves as features in the home, as curves are in vogue. There is a curved deck, a curved kitchen island and a curved wall in the entrance of the house. I would never pay extra for that in a rental property, but Generation Homes is showcasing what they can do, and they want it to look special, and that’s in our favour.
We put on solar panels because the suppliers also wanted to showcase their products, and we got it at a discounted rate and which benefited us.
Another advantage is that when the time comes to sell it, there’s already going to be lots of photos and it’s going to be staged. I went into a show home a long time ago and I can remember thinking, ‘can’t we just buy this one?’ I think that idea would be quite common so there’s a ready market of buyers out there. It might be easier to sell as the foot traffic is high.
LUCY
I’m from here. Cambridge is such a nice place to live and it’s easy enough to get to Auckland with the Expressway now. For families raising children, Cambridge offers plenty of sports activities, great cycleways, and access to Lake Karāpiro. The schooling in Cambridge is also very good, making it an excellent choice for families.
