Are Dual Occupancy Properties Worth the Investment?
Whether you're looking to accommodate extended family members, generate additional income, or expand your investment portfolio, dual occupancy properties are an option worth exploring.
Many believe that property investment requires a choice between capital growth and rental income. Dual occupancy properties challenge this notion. You just need to set it up properly to enjoy both benefits.
What Are Dual Occupancy Properties?
A dual occupancy property features two separate dwellings on a single title. These can be a larger main residence with a smaller secondary dwelling or a modern design that appears as one building but consists of two distinct living spaces.
Although it may seem the same as a duplex, dual occupancy properties differ because they remain on a single title. Duplexes are subdivided into separate titles through Torrens or strata titling, allowing each dwelling to be sold independently. Dual occupancy properties, on the other hand, avoid the costs and complexities of subdivision and the additional council and water rates.
For homeowners, dual occupancy properties allow family members to have extra living space or the chance to earn additional rental income.
For investors, they provide a cost-efficient way to earn two income sources without the need for subdivision.
Different Types of Dual Occupancy Setups
Traditional Setup: The traditional setup involves adding a detached granny flat to the backyard of an existing home on a larger block. This is a great option for homeowners who want to provide housing for elderly parents, adult children, or tenants while still maintaining privacy. Granny flats are particularly attractive as they offer autonomy for the occupants. However, poor planning can lead to issues. Developers who focus too much on maximising space on small blocks may overlook tenant comfort, which can result in cramped living conditions and compromised privacy.
Modern Design Approach: Modern dual occupancy properties combine both dwellings into a single structure that looks like a duplex but remains on one title. Typically, these designs feature a larger main house with three or four bedrooms, along with a smaller secondary unit that includes its own kitchen and bathroom. This approach works well for homeowners who wish to rent out part of their property while living in the other. Investors find this design appealing due to its efficient layout, low maintenance, and depreciation benefits.
Investment and Lifestyle Benefits
Dual Income Potential: Dual occupancy properties create two rental income sources from a single piece of land, making them more profitable and efficient.
Housing Flexibility for Families: For homeowners, these properties can provide housing for elderly parents, adult children, or extended family. They offer independence for family members while keeping them close by.
Higher Yields: Dual occupancy properties in certain suburbs offer returns that are significantly higher than the yield usually seen with single homes.
Depreciation and Tax Benefits: Newer properties offer depreciation benefits, which can help reduce your taxable income over time. Features such as modern appliances and fixtures also provide additional financial advantages.
Cost-Effective Alternative: Unlike duplexes, dual occupancy properties don’t incur subdivision costs or additional council and water rates.
Practical Considerations for Success
Successful dual occupancy properties require careful planning to meet the needs of both homeowners and tenants.
Ease of Access: Tenants value convenience and privacy. Providing separate entrances for each dwelling, ideally with side or rear lane access, enhances usability and tenant satisfaction.
Thoughtful Design for Privacy: Effective design, such as soundproofing, strategic fencing, and landscaping, ensures that both dwellings feel private and comfortable. Clear separation between the spaces reduces potential conflicts.
Parking Arrangements: Providing secure, off-street parking for both units adds to the property's appeal, particularly in suburban areas where on-street parking may be limited.
Making the Most of Dual Occupancy Properties
Dual occupancy properties are a great way for homeowners and investors to maximise their property’s potential.
If you're interested in exploring dual occupancy properties, our team is here to help you navigate your options.
Feel free to reach out to us for expert advice and support.