If you’re thinking about growing your portfolio through property investment, knowledge and research is of utmost importance. If you’ve ever thought about investing in real estate by purchasing a property, splitting it in two and then creating dual revenue streams, then you’re in luck.
Also known as a duplex property, there are many Australians enjoying the benefits of investing in this type of real estate. We’ve got a quick summary explaining why a duplex might make a good investment for you.
What is a duplex?
A duplex is a single property on its own block of land that is divided into two separate residences. The residents in a duplex share one wall under the same roof, but have two separate entrances, and two completely separate floor plans.
Duplexes are built in a range of shapes and sizes, and come in single and double storey designs to cater to a range of family sizes and lifestyles. Regardless of the size of the design, each residence remains separate.
Should I invest in a duplex?
Here are just a few benefits to consider if you want to invest in a duplex.
Positive cash flow: Two properties are better than one. When you invest in a duplex and both dwellings are rented out, you will receive double the income and double the property appreciation.
Tax breaks: As the owner of a duplex that is being rented out, you’ll be able to enjoy tax deductions on loan establishment fees, account management fees, mortgage insurance fees, and stamp duty, among many others. If you’re an owner-occupier of half of your duplex, you’ll have half your mortgage covered by the second stream of income.
Strata title: If you buy a duplex on one title, in the future you can opt for a strata title. This means you can sell off each half-duplex separately. In many cases, when you sell a duplex to two separate owners, you may enjoy more equity gain than if you were to sell the duplex as a whole.
Dual living: You can live on one side of your duplex and rent out the other.
What to consider when investing in a duplex
When you invest in property, you want to be sure that there is capital growth, rental demand, and a good investment strategy in place.
To elaborate, it’s a good idea to conduct neighborhood research and determine whether the location you wish to build your duplex in has good scope for capital growth. Similarly, you’ll want to work out if the area has a demand for renters. Finally, you’ll need to consider how much borrowing capacity you’ll need for a duplex, as well as creating a well-defined investment strategy that includes how much you would rent your properties out for.
When in doubt, always remember: “right property for the right location.”
Talk to Hotondo Homes
If you’re considering investing in a duplex, you need good, local builders on your side who understand the nuances that come with this type of build. If you would like to get into contact with local builders in your area, speak to Hotondo Homes today.
Hotondo Homes is not a registered financial advisory and therefore we recommend you speak to your financial advisor or a mortgage broker to receive expert advice before entering into a real estate contract of sale.