Friday 28 June 2019
Dual occupancy properties can mean different things to different people. Mechanically, a dual occupancy home is where there are 2 dwellings on 1 title, they can be either joined, under 1 roofline or completely separate. Each dwelling is usually completely self-sufficient in that they will have their own kitchen, bathroom/s, bedroom/s and living areas.
Having your property set up like this means you can take advantage of an additional income by renting out both or 1 of the dwellings. Some families choose to create dual occ homes to have a private space for older children to live while in tertiary education or just starting in the workforce and saving for a deposit on their first home. Other people choose dual occupancy living to take care of elderly family members or simply to reduce the financial pressure of home ownership by sharing the cost of the mortgage and utilities with another party.
Investors are drawn to dual occupancy properties for the benefit of multiple tenants under 1 roof and of course a larger rental income. Tax benefits will also be of great value to investors who can generate enough income from their dual occ property to have a cash flow positive property right from the start without having to wait for the value of the land and rental prices to increase over time.
The greatest benefit of owning or creating a dual occupancy property right now is that they are not very common across Australia. Valuers use the information they have on the structure and the land to value a property; it might be difficult for them to determine and reflect in a valuation report just how valuable your positively geared property is. However, as dual occupancy homes become more and more popular, you are reaping the rewards of extra cash-flow straight away, your capital growth will increase over time as with all real estate and eventually when you look to increase your portfolio, sell your property or refinance, you will be one of the lucky few who had the foresight to create a dual occ now and the win of achieving financial gains throughout the whole ownership period.
Tip: If you are looking to purchase an already established positively geared, dual occupancy home, you will most definitely struggle to find what you are looking for on the open market.
Afterall, who wants to sell such a valuable asset? We suggest looking in high growth areas with great amenities within a commute friendly distance from the CBD for an older property on a great size parcel of land and designing your own dual occ masterpiece!
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