Turnkey vs. House & Land Package: What's the Right Choice for Your New Home?
Thinking about building a new home? It’s an exciting process, but with so many options available, it can be a little overwhelming. Two of the most common ways to get into a brand-new home are through a turnkey package or a house and land package. While they might sound similar, they are fundamentally different in how they work, how you pay, and the level of involvement you have in the building process. Understanding these differences is crucial to making the best financial and lifestyle decisions for you and your family. Let’s break it down.
What is a Turnkey Package?
Imagine buying a brand-new car off the lot it’s fully built, ready to drive, and all you have to do is turn the key. A turnkey home is a lot like that.
A turnkey package is a contract where the builder handles everything from start to finish. This includes purchasing the land, designing and constructing the home, and finishing it with all the essentials like flooring, paint, light fixtures, driveways, and landscaping.
Key Features of a Turnkey Package:
- Fixed Price Contract: You agree to a single, all-inclusive price upfront. This price covers the land, the build, and all the specified finishes outlined in your addendum.
- Simple Financing: With a turnkey home, you typically get a single home loan at the end of the build. You pay a deposit and then the balance upon completion and settlement. This means you don’t have to worry about progressive payments to the builder throughout the construction process.
Another key point with financing is that there is less risk involved for the Bank with Turkey, which means you can secure your loan more easily.
- Minimal Hassle: The builder manages the entire project. This is a great option for those who are busy, live far from the build site, or simply don’t want the stress of overseeing the construction. Which means, your build will progress faster – a win-win for all.
- Certainty and Predictability: You know exactly what you’re getting and how much
it will cost from the outset. Which means there is no risk of budget blowouts from unexpected construction costs.
Who is a Turnkey Home for?
A turnkey home is ideal for first-time homebuyers, investors, or anyone who wants a straightforward, low-stress path to a brand-new property. If you value certainty in cost and a hands-off approach, a turnkey package is likely the right choice for you.
What is a House & Land Package?
A house and land package is a more traditional approach to building. It involves two separate contracts and a greater level of involvement from the buyer.
In this scenario, you first purchase a block of land from a developer or landowner. This is your first contract. Then, you sign a separate building contract with a builder to construct your chosen home design on that specific block of land.
Key Features of a House & Land Package:
- Two Separate Contracts: You have a contract for the land and a separate contract for the construction. This means you need two different types of financing: a loan for the land and a construction loan for the build.
- Progressive Payments: Unlike a turnkey home, a construction loan for a house & land package involves progressive payments (also known as “draw downs”). As the builder completes each stage of construction (e.g., foundation, framing, lock-up), your bank releases a portion of the loan funds directly to the builder. This means you start paying interest on the land loan and the drawn-down funds as soon as you settle the land.
- More Control and Customization: Because you’re the one commissioning the build, you often have more freedom to choose your builder, customize the floor plan, and select your own finishes (tiles, paint colors, tapware, etc.). This allows for a more personalised home.
- Potential for Cost Overruns: While the building contract will have a set price, any variations or changes you make during the build can add to the final cost. You also need to budget for things that might not be included in the base price, such as landscaping, driveways, or fencing.
Who is a House & Land Package for?
A house and land package is perfect for buyers who want more control over the design and building process. If you enjoy making design decisions, have a clear vision for your dream home, and are comfortable managing the financial logistics of a construction loan, this could be a rewarding option.
If you choose a House & Land Package with Fowler Homes, we will still offer you a Fixed Price Contract, and manage the entire build for you – just like a Turkney Package.
Still got questions? We’ve got answers. Reach out to our team on the Contact Us page, and we’d be happy to answer your questions or arrange a face-to-face meeting.
