Introduction

When it comes to new builds, investors often face the choice between buying land first and building later, or going with a ready-to-go turnkey package. Both can be great strategies — but the right choice depends on your personal investment goals, your cash flow, and how hands-on you want to be. Let’s unpack the differences so you can make the smart move for your portfolio.

Understanding the Two Strategies

Land and Build (Split Contract)

With this approach, you buy the land first, then engage a builder separately to construct your home. This is known as a ‘split contract’ — one contract for the land, one for the build. It gives you more control, but also more moving parts to manage.

Turnkey Package (Fixed Price, Move-In Ready)

A turnkey package includes everything — land, build, landscaping, even window coverings. You pay a price and receive a completed property at the end, move in ready. It’s a pretty hands-off approach. Of course purchasers should always understand the contract provisions dealing with price adjustments and variations.

Pros and Cons of the Land First Approach

Flexibility and Control

With a split contract, you can choose your land, then select your builder, home design, and finishes. This flexibility can be powerful — especially if you’re targeting a specific tenant demographic or want to optimise rental yield through design. We like working this way with our clients.

More Complexity and Timing Risk

This approach takes more time. You need to coordinate settlement, builder approvals, and construction timelines. Delays can happen — especially with weather, trades, or council red tape — which means longer waits for rental income and possible holding costs.

Pros and Cons of a Turnkey Package

Simplicity and Speed

Turnkey packages are appealing for their (alleged) predictability. You know what you’re getting and when you’re getting it. These packages are often pre-approved by developers and councils, so construction can begin quickly and without drama (allegedly).

Less Room for Personalisation

While it’s fast and simple, you’re usually limited to a selection of designs and colour schemes. That’s not a big deal for most investors, but if you want something tailored or more architecturally unique, you might feel boxed in. These types of properties are often sold as “investment grade” and CAN be inferior in quality, it really depends on the package, the location and who’s building.

Key Factors to Consider Before You Decide

Finance Structure

Split contracts typically mean progress payments during the build phase. You’ll need to manage cash flow as the loan is drawn down in stages. Turnkey builds are usually paid at completion, which can be easier for some investors to finance upfront.

Timing and Risk Appetite

Turnkey can be quicker and is perhaps more predictable, while split builds may deliver better returns but with more upfront time, coordination, and risk. Think about your investment timeline. With us helping you, we handle all of the moving parts for you.

Strategy That Suits You

There’s never a one-size-fits-all when it comes to new build investment strategies. The right path depends on how involved you want to be, how quickly you want rental income, and what kind of control you’re after. With expert guidance, you can avoid common pitfalls and choose the option that gives you the best return — and peace of mind — in 2025 and beyond. We talk you through all the pros and cons of course, but yours and our priority should ALWAYS be location location location. Everything else follows from there.

FAQs

1 What’s cheaper — land and build or turnkey?

Land and build can be cheaper upfront but may include hidden costs and delays. Turnkey is more predictable, but slightly higher in price due to full-service delivery.

2 Which strategy is better for first-time investors?

Turnkey packages are generally easier and lower stress, making them ideal for first-time investors.

3 Do banks finance turnkey builds differently?

Yes. Turnkey properties are usually financed as a single loan after completion, while split contracts require staged payments during construction.

4 Can I still customise a turnkey package?

Some developers offer limited choices for finishes or colours, but full customisation is rare.

5 What risks come with land and build strategies?

Construction delays, builder insolvency, and rising material costs can all impact timeframes and budget.