Dual occupancy homes are on the rise, especially as they create wonderful investment opportunities for homeowners and landlords. Not only can they provide accommodation for your family but you also get a separate rental income to help pay off your mortgage quicker or grow your nest egg. With an affordable property shortage in NSW, dual occupancy homes are only going to increase in the near future. If you wish to invest in dual occupancy homes, here are some great tips.
There is no one size fits all design
You can be as creative as you like with dual occupancy properties as they come in many forms. It could be what is known as a duplex or attached dual occupancy, two dwellings separated by a wall or they could be one home on top of one another. They could also come in the form of two separate free-standing houses which is termed a detached dual occupancy. Whatever the layout, all can provide rental opportunities or house your growing family. Because of the variety of designs available, you need to think carefully about what it is you want from the dual occupancy property both in the short and long term.
Have more cash than is necessary for the build
No matter how organised you are or how competent your builder may be, never underestimate how much the construction of a new duplex will cost you. Speak to your lender and have a solid understanding of your budget and ongoing cash flow. One of the things that can never be emphasised enough is to have more money than is necessary to make sure you can cover any unexpected costs or delays that may occur. Once complete, always be realistic about how much you are going to earn off the back of your property especially when renters are difficult to come by.
Be prepared for a faster turnaround on approval
Thanks to the new planning laws in NSW, you can now fast track your approval for dual occupancy properties provided your design meets the minimum or maximum requirements. So make sure you have everything ready to begin in anticipation of this as approval can occur in under three weeks, way less than the two to three-month average before the Complying Development Certificate (CDC) came into action.
Increase the value of your property with dual occupancy
Depending on the design of your dual occupancy property and your suburb of choice, it could be worth up to 30 per cent more than a property which is single occupancy. Dual occupancy properties are a great investment, particularly as they offer that second dwelling to provide a rental return. Smaller properties such as dual occupancy homes are in high demand for young people and retirees who are looking to downsize. If you are planning on renting out one part of your property, it is wise to never fully rely on rental income to cover the bulk of your expenses.
Keep up to date with the latest rules and regulations
Make sure you visit the NSW Government Planning Portal to keep abreast of the latest Complying Development Standards (CDC). As it currently stands, blocks must be at least 400 square metres or the minimum lot size according to your local council, and at least 12 metres wide. Where one dwelling resides on top another, the block must be at least 15 metres wide. Buildings must have a minimum side setback of 0.9 metres, and each dwelling must face a public road. Each dwelling must also have at least one off-street parking spot.
Research your choice suburbs before you commit
While you may be keen to buy the very first property you visit, research will keep you clued in to potential growth areas. If it is your intention to rent, then make sure that there is a strong demand in the area and that properties are close to public transport, shops and schools. While this may not be your personal priority, it will ensure your dual occupancy property will keep the renters interested. Due diligence is always necessary to ensure you are making decisions based on facts.
Speak to the experts
Builder, designers, realtors, accountants, mortgage brokers and lenders are all knowledgeable when it comes to property building and investing. Speak to the experts and ask questions, so you understand every part of the process. Poor communication, misinformation and failure to follow up on things will only give rise to problems, regardless of what stage of the process you are at. Seek unbiased information from those who know their trade before you commit. Never trust an expert if it is in their best interests for you to proceed without conducting your own form of independent research to back it up.