Welcome to Home Building Like a Boss, the podcast dedicated to helping first home buyers in Perth build their dream home with ease and excitement. I'm Jamie, your host and go to building broker. Are you ready to feel empowered, in control and excited about your building journey? I'll help guide you with expert advice, insider tips and tricks and real life stories to help you navigate the confusing world of home building.
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Hello, and welcome back to another episode. I am your host, Jamie, as always. Thank you so much for being here. This week, we're going to get straight into it, and it's probably going to be a little bit of a quick one straight to the point. I'm going to discuss with you. Why builders are not paying your rent while you build.
You've probably seen, I would say, seeing this promotion online will pay your rent while you build. And it's like, Oh my God, amazing. That solves my problem of having to pay rent and a mortgage while it's under construction all at the same time. And in certain situations. It does help. And if you need to use that tool to your advantage, to help you get into the market, into your own home, a hundred percent, do it if it's right for you, but you need to know how it works and the terms and conditions with this promotion and how builders are setting up to pay your rent while you build.
Essentially. Builders are not actually paying your rent while you build. They're paying you your own money while you build. So, how this works is usually the promotion is built inside the base price of the home. Like all promotions and marketing in the building world, everything the builders do is built into the base price of the home.
So, let's say you're looking at a home and it is 260, 000, right? 260, 000 base price of the home. Now, with the pay rent while you build, normally most promotions for that specific marketing promo is 10, 000. So some builders will pay 500 for 20 weeks. That works out to be 10 grand in total. So, your base price of the home from your 260 is now 270, 000 and the builder is going to pay you 10 grand in lump sum when your settlement goes through.
So actually what's happening when you break down this promo is you are getting 10 grand of your own money back through the builder. So you finance an extra 10 grand if it fits in your budget and a lot of the time this doesn't work because it doesn't fit in people's budgets at the moment. Your build is now increased by 10 grand and now the builder is paying you that 10 grand that you just took out 10 grand of finance.
So, you're actually paying interest rates on that 10 grand as well. So, yes, it works in a sense. If you need to use it as a tool to help you get into the market and into your house and out of your rental, use it to help you pay your rent while you're in construction. But, know that it is your own money.
The builder is not giving you money, and they're not giving you 10 grand, they're not giving you 500 for 20 weeks out of their own money, they are giving you your own money back to help you cover rent and construction. And that is the promotion, the builder, builders are never giving anything away for free.
Same as all the other promotions out there. It's built into the base price of the home and it is your own money. So you are paying for what you get with renting and construction. Chat to your finance broker and understand how and what your payments are going to be and what you need to do to make it work to pay rent and construction loan at the same time.
Usually it really depends how your mortgage broker sets it up because you can do principal and interest, interest only. And then obviously builds up through construction as your builder progresses through each stage. So you don't pay your first full repayment until you get the keys. You're not paying a full mortgage and full rent at the same time.
You obviously need to make sure you're comfortable with. Paying rent and the construction loan repayments. And if you do need to, and it fits in your budget, you can use that 10, 000 that the builder pays you to help you cover that, pay for furniture. You can use it for whatever you want really. They don't actually pay it to you each week, 500.
They pay you 10, 000 lump sum. Literally once they get your finance money, you get 10, 000 back in your pocket of your own money. So it is a great tool. If it's something you need to support you to get into your home, but no, builder is not giving you that money out of their own pocket. They're giving you your own money to pay your rent while you build.
It sounds amazing. And that's why it draws so many people in because it gives you that sense of, Oh yeah, I can do this. I can make it work. They're going to pay. My rent while I build, it's going to make it less stressful, less tight, less budgety. You've got money to work with and still live a little do your things.
Some people usually while they're renting or paying. A mortgage and rent at the same time in construction, you've got to stop going out, doing all those things, you know, you've got to make sure you can make it work and pay both of those repayments. And it does get tight towards the end of construction because you are paying that higher mortgage repayments and rent as well.
So use it to your advantage if that works and within your budget. Just know it is your own money and you are paying interest rates on that as well. If you have any questions about builders, marketing, anything, always feel free to reach out if you have any questions but always make sure you check the terms and conditions on these promos and marketing material.
Builders will have at the bottom of their website, you'll have the promo and it'll always say on there this promotion has terms and conditions. Scroll all the way down. There'll be a disclaimer section and a terms and conditions section on the bottom of the builder's website. You can go in and read the terms and conditions and the breakdown of how that promotion is set up.
Please, please, please, please, please, before you sign on the dotted line for anything, any promotions, if you're signing up to a builder because of a promotion. Make sure you read the terms and conditions of that because it is so important. Nine times out of ten, there'll be things in there. It's not usually what it actually is.
It's too good to be true. It's too good to be true. It's too good to be true for a builder to be paying a rent while you build. End of the story. Builders do not give away anything for free, especially if you're signing up with a builder because of a promotion. My general advice is Do not sign up with a builder because of a promotion.
Nine times out of 10, you will end up shit Creek with that builder because you've signed up with them because of a promotion, not because of price, quality, timeframes, honesty, integrity, communication, all the things that you should be looking for in a builder that actually matter, that will contribute to your journey rather than.
The dollar value, the marketing promotion, the free kitchen, two grand pool, like get ready for summer, have some free air con. None of that exists. Sign and pick a builder based on what you want in a home. How do they work? How do they operate? What are their reviews like? Client stories. Not because of a promotion.
If you do and there's a promotion there, please, please, please read the terms and conditions and break it down. Ask your sales consultant, ask your builder for the information and make sure they give it to you because you'll just end up signing on the dotted line without seeing the terms and conditions.
And then that usually can create problems sometimes too. As long as you're aware of everything, then you can make an educated, informed decision on does that promo work for me? And in my favor, and am I aware of everything? Not the sneakiness of it all. If you have any questions, always feel free to reach out to me on Instagram.
I'm happy to help you with that kind of stuff as well if you do get stuck. Very similar to house and land packages, house and land packages will always have terms and conditions and disclaimers on there. And it basically says like, this house and land package is generic, we can change at our own discretion, blah, blah, blah, blah, blah.
Make sure you always read. Those two. Always, always, always check your terms and conditions. If anything you want to take away today, make sure you take away that with you. Thank you so much for tuning in to the home building like a boss podcast. I hope you enjoyed today's episode and learn something new.
Remember, you've got this and I've got your back until next time. Stay inspired, stay informed, and stay confident on your building journey. I can't wait to chat with you on the next episode. Don't forget to check out the show notes for more information and free resources. If you haven't already hit that subscribe button so you never miss an episode of the home building like a boss podcast.