Turnkey Properties vs House and Land Packages in NZ
If you’re looking to invest in New Zealand real estate, you may be intrigued by a turnkey home or a house and land package. Both options offer exciting advantages for first home buyers and those looking to make their next move. As Auckland’s trusted mortgage brokers for over 40 years, Mortgage Masters can take you through the key similarities and differences between turnkey properties and house and land packages. Let’s see which approach makes the most sense for your property investment goals.
What is a Turnkey House?
So, what is a turnkey house and what are the perks of a turnkey package? Well, for starters, a turnkey home will be ready to move into. You need to put down 10% before construction commences and then pay the rest once the build is finished. The price of a turnkey package includes the cost of both the new home and the land. There are two components to the home loan, which are released together with a fixed price while the developer manages construction.
The immediate useability, hands-off approach and comprehensive project management make turnkey homes a popular choice with New Zealanders. However, even with all these pros there are still some cons to consider, such as the higher purchase price and less control over the home’s design and style.
What is a House and Land Package?
Now that we’ve answered ‘what is a turnkey house’, let’s go over house and land packages. As the name suggests, you buy the land from a developer and then the house is built. While house and land loans are typically bundled together, you can arrange for separate loans, too. Payments are staged throughout the construction process, with mortgage and interest payments increasing as the new house is built.
The cost savings and simplified buying and building process are some of the biggest pros of house and land packages. For some first home buyers, a house and land package presents financial challenges as they need to cover rent and mortgage payments at the same time until the home is ready to move into. The possibility of building delays and locations farther out from the city are potential downsides, too.
Final Thoughts: Turnkey Package vs. House and Land NZ
When buying a new home, you need to decide whether a turnkey or house and land package is better for you. These two approaches both help Kiwis get into their new dream home, but there are differences in cost, simplicity, contractual obligation and security to think about. A turnkey package is often preferred by banks as the builder carries the risk until the house is finished. It’s also cheaper as you just pay rent until the house is complete and then switch over to the mortgage upon moving. That being said, you’re likely to get a better price on a house and land package, and if you’re happy to head out to the outer suburbs, this is a promising investment opportunity.
Get into Your Dream Home with Mortgage Masters
Mortgage Masters proudly offers independent financial advice and competitive home loan products. Contact us today to discuss mortgage options for a turnkey home or house and land package.