How Building a Duplex Can Expand More Than Just Your Back Pocket
The most common thing you hear in a conversation about building a duplex is that they’re a good investment. Now that’s certainly true, but that’s not the only way to think about them! There are lots of advantages when it comes to having two separate, self-contained abodes on one allotment of land.
Firstly, What Is A Duplex?
Quite simply, it’s a single building on a single residential property with two separate living spaces. The division can occur by a dividing wall to create two side by side dwellings, such as a townhouse, or they can be built one on top of the other like an apartment building. Any more units than two means it’s no longer a duplex!
Often they’re on one title, which means both dwellings must be sold as one unit, though it’s possible (but potentially expensive) to subdivide each unit into two separate titles so that each can be sold separately.
A Good Investment – Yay or Nay?
A duplex offers a higher yield, which basically means a higher square metre rate because you aren’t ‘wasting’ so much of the block. Essentially it creates more equity, which in ordinary everyday language means more bang for your buck. In other words, the property that you’ve built is worth more than the amount you’ve spent on it, plus, you have the potential of receiving two rental incomes versus just one.
Of course, it’s never as easy as that. There are some hidden costs that you need to be aware of! Often the blocks of land that are suitable for a duplex are more expensive and need appropriate zoning to subdivide the property. Further, subdividing can be a real hassle involving high fees to town planners. Both these factors means your investment ends nowhere near as lucrative than first envisioned.
Whenever you’re thinking of an investment, it’s never quite as simple as ABC. Location is critical when thinking of developing, and if your research hasn’t been adequate and the property is not suitable for development, you can end up with a loss rather than a gain. Like any investment worth pursuing, it requires patience, wisdom and expertise and it’s not always as straightforward as it seems.
More Than One Type Of Investment
While primarily when we hear the word investment we think of money, there are more ways to think about this alluring word, never is this more true than when it comes to duplexes and residential building.
A building containing two homes comes with a range of imaginative possibilities:
Maybe for you, you are thinking purely of a financial investment. In this case, picking a prime location and renting out both dwellings may be the best option for you. Receiving two rental incomes can be a lucrative deal, and if you’re willing to be a supportive landlord, you may find the numbers in your bank account become very healthy.
Perhaps the location you are ready to build on is the location of your dreams – a sunny block by the ocean on the Central Coast – and you couldn’t imagine living anywhere else. However, you don’t feel you need the whole block to yourselves and are more than happy to get a good tenant in to live next door and help out with some of the expenses of owning a home. This is a fantastic option.
Maybe you’re interested in community and want people you know and love to live right by you but not exactly in the same house. Splitting the costs of a duplex can be a fun and smart way to live in a fantastic location with people you love, while not having the extra burden of having to live within the same walls.
With AirBnB exploding in popularity, having a duplex is an amazing way to keep some money coming in while ensuring there is ample space to entertain during the holidays. Having plenty of space so friends and family can stay with you more easily can make the holidays more fun than stress.
Maybe you work from home, but still want to keep the separation obvious between home life and work life. There’s no easier commute than walking around the corner!
If you’re looking to build, but can’t quite settle on what it is exactly what you want, maybe it’s time to consider building a duplex.