Buy the model. The builder pays the rent.
You buy a builder's model home, and the builder leases it back to keep using it as a sales model. Here's how the deals we see typically work.
Five steps, start to finish.
Straight from the builder. Models usually carry upgraded finishes and landscaping.
It stays open as their sales model.
8% of the purchase price a year, paid over 12 months.
After 12 months, 6 months at a time if the builder still needs it.
Move in, rent it, or sell it when the lease ends.
What 8% looks like.
Using the median price of the model homes we're tracking.
Illustration only. Your price, terms and costs will differ.
| Model price (median here) | $790,000 |
| Rent: 8% a year | $63,200 / yr |
| Paid over 12 months | ~$5,270 / mo |
| Down payment investors typically use | 50%+ ($395,000+) |
| Your use of the home during the lease | None |
Historically, an equity play.
- Investors who want a newer, upgraded home at a set rent while it builds equity.
- Buyers who don't need the home yet, and want it working for them until they do.
- Not for anyone who needs the home soon or wants to use it during the lease.
- No personal use until the lease ends, and the builder decides on extensions.
- Down payment. Plan on 50% or more for the rent to cover the payment and carrying costs. Some are cash only.
- Appraisal. Models are priced above similar non-model homes, up to ~49% more per sq ft here.
- Who pays taxes, insurance, HOA and upkeep is set in each lease.
- Some incentives may be available. They're shared after a Buyer Broker Agreement.
Leaseback models we're tracking.
Terms described are typical of the model leasebacks we see and vary by builder and model. Figures are illustrations, not guarantees. Inventory and information are subject to change at any time. Talk with a CPA, financial advisor and lender before you buy.