‘Dual Occupancy' Property Investment Is An Undervalued Strategy
As the name suggests, dual occupancy features two livable spaces within one home.
More and more Australian property investors are using this strategy because the added cost to create the duplex is significantly lesser than building another standalone residence.
Dual Occupancy strategy is a clever way to build your wealth as you can live in one home and rent or sell the other.
Benefits of Dual Occupancy Investment Strategy
Dual occupancy homes are beneficial for property investors who are interested to demolish old buildings and build two livable spaces in one location instead of spending more in renovating an older dwelling.
Moreover, investors must deal with one contractor working on the project. There are also tax benefits and stamp duty as you may only need to pay on the land.
Be sure to check with a licenced property investor to understand more benefits of investing in dual occupancy homes.
Downsides of Dual Occupancy Strategy
One major disadvantage of renting out a dual occupancy property is that you’ll have limited privacy because you must consider tenants living within the same residence.
Of course, that is this is not an issue if you do not intend to occupy the property yourself.
But even if you are renting out the whole duplex, you may still need to spend on custom design such as noise insulation and extra ensuites like bathrooms, storage, and living spaces.
Before You Hire a Building Contractor
Before you start looking for a building contractor to knock down or renovate your investment property to build a duplex, you need to be certain that this strategy aligns with your investment goals.
You may also need to check with local zoning policies., It is advised that you work with an investment advisor to check if your investment can generate you enough revenue.
Building a duplex can be expensive so you may lose money or even your property without proper investment and business planning.
Frequently Asked Questions
A dual occupancy property (also known as duplex) is a type of real estate that is composed of two or more livable areas under one main roof.
Many duplex owners in Australia choose to live in the main living area and rent or sell the other.
More and more property investors are into dual occupancy because it can provide regular recurring income without losing their residence and even enjoy the prospects of capital growth.
Yes, you may live in one house and sell the other as long as they have separate titles.
You may also sell both divisions, which is best in cities where housing demand is high but stock is low.
However, selling a duplex may require extra work, so you may have to consult a real estate advisor who has the experience in dealing with dual occupancy transactions.
Knocking down and rebuilding two new living areas is ideal in the following conditions:
- You have a big block in a location where real estate prices are increasing
- You don’t want to leave your existing home, but you want to downsize
- You want to unlock your home equity by selling or renting out a division
While the rental rates vary from one location to another in Australia, many dual occupancy residences may attract a weekly rent of $400 to $750 per week.
If you are getting a renovation loan to rebuild your home to convert into a duplex, you need to find out if this rental rate is enough for you to pay the interest while still making enough profit.