Dual Income Properties
Benefits of owning a Dual Income Property
“You may have heard of Dual Income, Dual Key or Duplex homes and wondered what they are or the investment benefit of owning one ?”
To try to answer what they are :
☑️ Imagine looking at a house from the outside and it looks like one home with two parking garage doors
☑️ From the front looks like any other house on the block
☑️ Yet inside you would have a combination of a 3 bed home on one side and a 2 or 1 bed home with a common wall under the same roof line on the other side | or a 3 or 4 bed home on one side and a 1 bed home on the other
☑️ This is referred to as a Dual Key, Auxiliary or a Dual Income property
☑️ Two different addresses, post boxes, electricity and water meters etc
☑️ Cannot be Strata Titled into two separate dwellings
☑️ Some people refer to the second unit as a granny flat
The other type of dwelling is a Duplex property
☑️ This would equate to two separate homes with a common wall
☑️ Duplex can be Strata Titled into two titles and you can hold both or sell separately one or sell both
☑️ Meaning two different addresses, post boxes, water meters etc
Benefits of owning such a property include :
☑️ Amortise the costs of building two dwellings onto one Lot, saves on land cost + some build costs
☑️ Maximise the potential of one block of land
☑️ A strong increase in Rental Yields for your investment which will in turn increase your Return on Investment and thus Cash Flow
☑️ Meaning you will receive rent from Unit 1 + Rent from Unit 2 (equating to around 6% to 6.6% yield)
☑️ Current market rents for a single dwelling will be around 4.5% to 5% yield
☑️ Reduced risk as one side might be vacant for a short period of time whilst you have tenants in other side
☑️ There is a strong demand for auxiliary units / granny flats meaning low to no vacancy rates
☑️ Rental Yields of 6% or 6.5% will *ensure your Investment is Cash Flow Positive giving you an ongoing income for the life of the investment
☑️ Your return on Investment could be 45% to 50% (*dependent on your personal financial position & market fundamentals)
Locations which offer Dual Key dwellings include :
South East Queensland, New South Wales, Newcastle, Central Coast
Own Dual Income Property with 6.6% return for under $600,000.
3 ? 2 ? 1 ?
2 ? 1 ? 1 ?
Earn $730-$770p/w combined rental Income!
Set in a thriving region surrounded by natural beauty and all the conveniences close at hand ????♂️
?30min-40min to 2x CBD locations & popular tourist attractions inc 2 beaches
?4km to Newly Built $500million Westfield Shopping Centre
?Proposed Town Centre with retail & dining
?4km to TAFE
?Nearby Marina Precinct
?Local Private & Public schools, along with childcare facilities
?Nearby University Hospital & Medical Centre
Why would you invest any other way?
Only limited investor opportunities are available.
DUPLEX OPPORTUNITIES AVAILABLE
QLD, NSW, NEWCASTLE
Why Invest In A Duplex Development?
We believe that a duplex, or development project, is the only smart way to see a substantial development profit and a positive cash flow return in the current market. When purchasing a duplex for investment, it is safe to say that investors are looking for three key elements – capital growth, rental yield and return on investment.
Capital growth is when the value of a property increases due to the demand of housing in that area. You cannot control this, and you can only make an educated and very well researched guess as to when it will occur. When you build a duplex you are taking a single block of land, adding 2 houses, cutting it in half, and thus creating a development profit. A majority of the capital growth is now created by the 2 combined land values being higher than the original purchase price of the land due to strata titling of the duplex.
Now that you have decided to build a duplex you have to treat it as a business. In business cash flow is the total amount of money being transferred into and out of a business. In this case the business is the property investment. Cash flow can be separated into 3 categories:
- Negative cash flow – The property makes a loss and has holding costs.
- Neutral cash flow – The property breaks even
- Positive cash flow – The property makes a profit and shows a return
With interest rates being as low as they are most normal properties are now sitting around the neutral cash flow mark, while the more expensive properties are generally still quite cash flow negative costing you more money.
However, it is very important to remember that eventually interest rates will rise back to their historical average of approximately 6-7%. At this point a most of normal properties will return to being cash flow negative or even extremely cash flow negative. So in other words costing you more money out of your pocket.
Investors need to consider how they will cover these extra costs. Negative gearing will only see around half of your losses returned through tax deductions. Meaning that you will be out of pocket every year. This is where a duplex comes in.
A duplex provides 2 incomes under one roof and in most cases has positive cash flow!
Obviously having 2 incomes is better than one, but this will also provide you with financial security. If, for example, you have one side of the duplex vacant for a couple weeks you are still receiving rental income from the other side.(We do offer Renal Guarantee’s )
Based on our previous projects Duplex we have seen an average of 7% rental return or higher. This is a substantial cash flow positive return.