What Is a Turnkey Home? House and Land vs Turnkey Explained

As housing supply fails to keep pace with demand, house and land packages and turnkey homes are growing in popularity among Australian buyers and investors.

Both a turnkey home and a house and land package are great options for investing in a new build, but there are stark differences when it comes to inclusions, timelines, financing and complexity of the purchase.

Compared with a house and land package, a turnkey property will involve a different strategy for investors. 

What is a Turnkey Home?

A turnkey home is a pre-built property that is ready for move-in upon purchase. From an investment perspective, one of the biggest appeals of buying a turnkey home is the opportunity to start earning rental income sooner.  

A turnkey property already has everything necessary to be listed on the market for rent - it’s a brand new property, and no other work is required for investors after the purchase is finalised.

However, this means that there are no opportunities to customise a turnkey home before purchase - all inclusions, colour schemes, and landscaping are sold as is.

Comparing House and Land vs Turnkey Homes for Investment

Inclusions

A turnkey home will come with a complete set of inclusions that make it move-in ready, including landscaping, driveways, and window coverings. In some cases, a turnkey house may be fully furnished with interior design.

A house and land package will come with some standard inclusions, which vary between builders. Common inclusions for house and land packages include cabinetry, kitchen appliances, bathroom fixtures, and floor tiling - typically a basic level of features needed for home living. Unlike a turnkey home, however, certain features for a house and land package must be paid for via optional upgrades as part of the build or organised separately after settlement. 

As an investor, knowing what inclusions are accounted for in the build will affect the total upfront cost, which in turn affects projected returns.

Timelines

A turnkey home is only marketed when it is either completely built or close to completion.

As far as buyers and investors are concerned, there is only a short period between purchase and being able to start renting out the property.

In comparison, a house and land package involves buying off the plan and having the building work start after the land is purchased and the contracts are signed.

It can take anywhere from 12 to 24 months to finish building a new house and land package home and make it ready for tenants. During this building timeframe, investors will make no returns on the investment. 

For investors who want to see returns as soon as possible, a turnkey home is the better choice for investment.

Cost & Financing

Most house and land packages involve a construction loan where money will be drawn down at each stage of the build. This is because costs can change throughout the building process, whether due to material shortages or delays. 

A turnkey home for investment involves a fixed, upfront payment, with no risk of added costs at settlement. With the build already completed, builders can more accurately price the property without worrying about sudden costs. This certainty in pricing is passed on to investors.

Ease of Investing

A turnkey home would appeal more to investors who are time-poor, buying for the first time, or those who don't want to be involved in the building process. It's not uncommon for investors who want a more hands-off approach to settle on a completed property and start generating rental income almost immediately.

A house and land package appeals to investors who want the opposite - more control over the design of the home, as well as specifying what they'd like included within the build, and have more flexibility with the time constraints or a growth corridor strategy. 

Builder Direct offers investment house and land packages in Cairns and Mackay that are designed as turnkey solutions for investors. Our approach combines the best of house and land packages and turnkey properties - with estimated completion within a short span of 7 months, and a rent-ready home with a comprehensive list of inclusions that tenants love.