The builder covers the utilities, HOA (home owner’s association dues), insurance, and taxes during the lease back period. It is not only a safe investment but one with guaranteed positive cash flow during the lease period. The builder will be using the home as a model to sell new homes to home buyers in the community. Investors know that this type of investing is a rarity and it is often called the best answer to long distance investing as it is virtually hands off.
Models homes are the first homes built in the neighborhood. Builders always build in price increases as the neighborhood is selling and the model homes generally have the best of upgrades and amenities. As the community is built up and the homes appreciate you are locked into the original lower pricing from the time the community begins.
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