Opting to build a duplex rather than a free-standing home can net you some attractive benefits, both financial and personal. Here we look at what a duplex is and the 3 biggest advantages of building a duplex to sell.
What is a duplex?
A duplex is a single residential property containing two separate dwellings under one roof. These are either attached to each other by a central wall or are above and below each other like apartments.
Each dwelling is a separate home and has its own separate entrance and parking space or garage and a private or sometimes shared yard and amenities.
The financial benefits of building a duplex
There are a number of financial benefits to building a duplex which can make it an attractive proposition for investors;
- No “body corporate” is required, meaning no fees or management issues.
- It can produce strong value growth for a much lower price than a detached house.
- It can create equity quickly.
- Because it is two dwellings on the one lot, you can save on build costs, stamp duty, insurance, and rates.
- If you’re renting out one dwelling, you can claim more in tax deductions for those items shared between your home and the rental property (if both dwellings share a common back yard, check out these great garden ideas).
- It offers a range of potential income streams including the option to;
-Rent out both dwellings for a higher rate of return than two apartments could achieve.
-Live in one dwelling and rent out the other to pay down your mortgage.
-Sell both dwellings for more than a single house could achieve.
-Sell one dwelling and live in the other, putting the profits towards another investment.
Family benefits of building a duplex
As well as the attractive financial advantages, building a duplex can be a welcome solution to some family-related problems.
If you have a relative who needs assisted living, you could install them in one dwelling and be close by to provide support and care as they need it, while still maintaining your own privacy and independence.
Or if you have elderly parents or grandparents, they could live in one dwelling, which could save them the cost of a retirement village and they would be conveniently close by if you had a young family in need of occasional daycare.
Personal benefits of building a duplex
Building a duplex can also have personal advantages, particularly if you plan to rent out one of the dwellings while your equity grows.
If you’re new to property investment, it can be a good way to ease yourself into the market. You can learn about being a landlord, including finding good tenants, customizing a lease and collecting rent, without having to pay fees to a property manager.
You’ll also be close by, allowing you to monitor your property, carry out any needed repairs and ensure your tenants are looking after your asset.
Of course, as with any investment, building a duplex comes with some potential drawbacks such as;
- Whether you can get zoning permission.
- How much it costs you in permits and fees.
- How fast property values rise in your chosen area.
- Whether you can maintain 100% occupancy if you rent.
But despite these question marks, the pros of building a duplex definitely outweigh the cons. As long as you do your homework and seek professional advice when needed, there’s no reason why you can’t join the thousands of other property investors enjoying healthy returns from building a duplex to sell.
