Dual Occupancy Property Pros and Cons.
The pros and cons of duplex and dual occupancy/auxiliary properties mentioned below is just a brief overview. I’m happy to discuss this with potential investors in more depth if they’d like to.
Firstly, as I’ve explained before in previous articles the terms around dual dwellings can be a little confusing as different council areas use different terms to describe them. So for ease of use in this article we’ll be referring to dual occupancy / auxiliary dwellings as the type of dual properties with an auxiliary which is limited by size and room restrictions as per the local Council plan and that can’t be strata titled, and a duplex property as a dual dwelling which can have 2 or more bedrooms on each side (ie don’t have the restrictions) and can be strata titled. I should also make it clear that I am referring to the product which is available in areas such as the Logan City Council Area South of Brisbane and also the Ipswich City Council Area West of Brisbane, as these areas are where we have had the most success in providing dual occupancy investment property solutions to meet our client’s goals and aspirations.
I’ll begin by outlining a few of the key advantages that I see for dual occupancy/auxiliary properties, and I’ll then move onto describing duplex pros and cons.
Dual Occupancy/Auxiliary Pros:
- There aren’t land size restrictions to fit dual occupancy properties, this enables the investor to choose from numerous blocks within the Council area. It also means that developers aren’t able to mark the price of a block up because it eligible for a dual occupancy, as regularly happen with duplex blocks.
- The costs are far more reasonable for dual occupancy Council Fees. There aren’t all of the town planning and Council approval processes that are associated with duplexes, this saves a huge amount of time and money.
- The reduced costs for the land component and also the council fees and time constraint savings means that dual occupancy properties are able to produce a higher yield than a duplex property is able to.
- One set of rates means significant savings to the annual outgoings of a dual occupancy/auxiliary. This also adds to the higher yields that they produce.
Dual Occupancy Cons:
- Inability to strata title as you can with a duplex.
- Restrictions on the size of the dwellings.
- Only one driveway egress/crossover.
- There isn’t the instant uplift which can be seen in some duplex cases.
- The ability to strata title the property which means that you can sell off each of the individual halves separately.
- In some instances, there can be uplift when the project is finished, if you find a block of land that isn’t being sold as a duplex block when you purchase it.
- They are rarer than dual occupancy properties and can be in high demand from purchasers.
• Duplex properties are far more expensive for the land component, which is rare and is generally priced upwards accordingly.
• They have far higher Council Fees, and time constraints associated with the approval are much longer.
• As they are harder to find they are generally more expensive.
• The higher costs and time constrains associated with them mean that the yields aren’t as high as a dual occupancy.
I’m asked all the time about what is better a ‘dual occ’ or a ‘duplex’. The answer is not a clear one and is as follows:
Both dual occupancy and duplex investments are good, and which is better depends on the individual’s situation. Which property is chosen will need to take into consideration the individuals current and future circumstances and investment goals and aspirations. Each can work will for different investors.