Dual living constructions consist of three main categories; Duplex, Dual Occupancy, and Dual Key. The differences between the three are mainly due to titling, and this often depends on local Councils, and the designations, requirements, and particular types of constructs they allow.
All three are mostly similar to a house, but they each differ in that they are primarily two dwellings under one roofline.
Duplexes are strata-titled and require specific zoning and other strict guidelines to provide two individual titles. These requirements also increase council charges and titling costs. Duplex prices then rise accordingly to approximately $100,000 more than equivalent Dual Occupancy and Dual Key properties, which are on only one title. Duplexes may bring in slightly higher rents; however, the yields are still usually less than dual occupancy / dual key returns, which can be as high as 7{830d1043633127e1fb46cc80e8e725429e813d4a1f208e7acb534f94035a1f28}.
No matter the style, each dual living unit features a private entrance and is entirely self-contained with a fire-rated common wall dividing the two properties. Beneficially this also provides acoustic insulation between the two units. Water and electricity meters, mailboxes, clotheslines, et al. are also separately installed for each dwelling.
“Dual living dwellings are usually offered and built as “House and Land” packages with split contracts.
Configurations are set by bedrooms/ bathrooms/ cars per dwelling, with the bedroom configurations being 4+1, 4+2, 3+1, 3+2, 3+3 (e.g. four-bedrooms one dwelling, and one-bedroom the other). Bathrooms and Garages are typically either 1 or 2 in the primary residence, and 1 in the secondary unit (except for duplexes which tend to feature mirror configurations).
Each of these types of construction is built on a standard residential land block, though there are specific land size criteria for different areas and estates.
Investors need to be aware that, although dual income properties are very attractive, the configuration needs to suite both the investors requirements and be attractive to long term tenants. If the configuration is incorrect, tenants possibly will clash, which will destabilise the income returns when one leaves.
Investors need to be careful they are dealing with experienced builders and developers who are mindful that Local Government Area’s (LGA’s) have different regulations. For example in Queensland, they are currently allowed in Ipswich City (in the western suburbs), Logan City, (in the southern suburbs) and Moreton Bay (in the northern suburbs) with different developments allowing restricted numbers in the particular development while other developers will not allow Dual Occupancy development in their estates at all.. The Sunshine Coast, Toowoomba, & Scenic Rim councils allow Dual Living property constructions throughout their LGA. In only a few Brisbane city and Gold Coast locations may they be constructed under certain conditions.
If the land is not already approved for Dual Occupancy, there is normally an additional application fee for Material Change of Use (MCU) (varies from $22,000 to $28,000 plus consultants fees).
Several Councils only allow the second dwelling to be one-bedroom, and no larger than 48m2. Other Councils only permit dual living houses to share only one main entrance, with the provision of 2 further private entries once inside – typically one upstairs, the other down. This configuration is commonly known as a dual-key.
“Some Councils are phasing approvals out, while others are refining their criteria, so it is critical to be ahead of the game when planning your strategy”.
The way we see it, dual living properties can offer a range of investment prospects. If an investor purchases a newly created dual living and leases out both sides, they will receive the benefit of two rental incomes instead of one. Also, two units on a single title will attract only one set of council rates and no strata fees. The electricity and water are on separate meters; however, these two costs are the tenants’ responsibility.
This configuration also provides a unique opportunity for owner-occupier arrangements. A property owner, (investor), can live in one unit and lease out the other to tenants, or provide an independent living space for aging parents or teenagers. This style of housing also appeals to tenant’s that may wish to rent the “Main” building and have their Parents / Children rent the auxiliary.
At PIC, we are often approached to provide solutions for tailored investment strategies, and we view dual living options as an asset in most Investors portfolio.
If financed correctly, they tend to be cash-flow positive. Dual Occupancy property in particular also feature several benefits such as two income streams, general affordability, a high rate of return, and associated tax benefits.
(* We are not Financial Planners, nor licensed to give financial advice. We do work with accredited professionals who speak with our Clients, and also refer their Clients to us).
At PIC, we specialise in finding investment properties to suit all budgets and investment objectives. We have access to experienced Builders and Developers who specialise in dual income properties across Brisbane, the Sunshine Coast and the Gold Coast. Although available land that is correctly zoned is becoming scarce we can still source a wide range of dual living opportunities across South-East Queensland. So, if you’re looking for a quality investment property, contact us today.
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