What is a Dual Occupancy Property
Dual Occupancy properties are not a new concept and there are many different ways of getting two properties on the one residential building block.
Townhouses, semi-detached houses are just some of the ways this has been done in the past and they all have some key concepts in common:
- They utilise one residential building block
- They increase the rental income
- They share a common wall
Investing in new Dual Occupancy house and land package is a property investment strategy for high income earners who want the benefits of depreciation and interest expense for their residential property investment loan to reduce their taxable income.
Investing in a Duplex Development is very different
Negative Gearing is not the only option
Negative Gearing is when your interest cost is higher than the return from your investment property. You get tax benefits because your total income is reduced and the property costs more to own than it returns. The reason property investors use this strategy is that they expect the property to grow faster in value and they are not taxed on that until they sell it.
For many property investors this has been the only option: Buy a property with a return of 2-3% knowing that the equity increase is the main goal and in the short to medium term they get to pay less tax because of the losses from depreciation and interest.
With Dual Occupancy Properties you get the increase in value without the losses.
See the financial calculations for one example of a Dual Occupancy House and Land Property Investment.
Single House vs Dual Occupancy Property
Property Investment Strategies vary from person to person based on their risk appetite and their time horison but factors like tax, borrowing capacity and rental income are also very important.
One of the best features of a dual key property investment is a very good return, particularly compared to the interest earned on term deposits these days. This makes them appealing to savvy investors who have good equity, an income stream and a Self-Managed-Super-Fund (SMSF).
A dual key property investment will often return around 7% which is excellent and stable and if your deposit is large enough you’ll be able to use the investment as a source of income.
Read our blogs about Dual Occupancy Investment Properties
Understand the difference between Dual Occupancy and Duplex Properties
Dual Occupancy Property Configurations
Dual Occupancy properties come in a number of different configurations, including:
- 3 bedrooms x 2 bedrooms
- 4 bedrooms x 2 bedrooms
- 3 bedrooms x 1 bedroom
Each of these comes with at least one car space per property. This enables you to choose the best dwelling type for the suburb where the property will be built.
Sometimes you don’t get the choice because the builder or developer has chosen the most appropriate dwelling for the site, available space and suburb.
Developers spend a lot of time and money understanding the type of dwellings that renters and home owners are looking for and we can provide you with this information – just make contact and ask.
See the financial calculations for one example of a Dual Occupancy House and Land Property Investment.
See a Virtual Tour of a Dual Key Property
Understand the differences between a Dual Occupancy and Duplex Property