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Dual income properties (also called ‘dual key’ or ‘dual occupancy’ properties) are an increasingly popular option for savvy investors. That’s because these homes are also attractive to tenants and provide investors with additional benefits when compared with a traditional house.
First, let’s clarify the unique characteristics of dual income properties and explain how they differ from duplexes.
As the name suggests, a dual income property provides investors with the opportunity to generate two rental incomes from a single property. Dual income property characteristics:
Dual income properties usually offer a three or four-bedroom home on one side and a two-bedroom dwelling on the other. Other configurations are available, depending on land size.
A dual income home is under one land title, which means that you only pay council rates on a single block of land.
Dual income properties can be built on slightly smaller blocks of land as compared to a duplex, which can reduce land and construction costs.
Now let’s look at the key benefits that dual income properties provide for investors.
This is the most obvious benefit that dual income properties provide for investors – two rental incomes rather than the one that you get with a traditional property.
It’s no secret that market rents have increased significantly over the past couple of years in most property markets around Australia, so why wouldn’t you want to take advantage of this?
Vacancy rates are also at record lows due to the housing supply and affordability crisis that most property markets in Australia are experiencing. This crisis is showing no signs of easing for the foreseeable future due to population growth and predicted shortfalls in required new home build volumes.
Australia’s housing supply and affordability crisis is helping to drive property prices up in general, but dual income properties are particularly attractive to investors due to their additional income-generating potential. They can also be easier to sell for a great price for the same reason.
A dual income property provides you with the opportunity to rent both of its self-contained dwellings out to tenants, or to live in one yourself and rent the other one out. This flexibility makes dual income properties an attractive option if your personal circumstances and needs change over time.
Dual income properties are particularly attractive to investors due to their income-generating potential. Their resale value is excellent for the same reason.
Dual income properties can attract a more diverse range of tenants than single income properties, minimising the risk of having extended tenant vacancy periods. For example, a dual income property with a 4-bedroom and a 2-bedroom dwelling could attract families as well as couples or singles. These homes also cater to multi-generational family living needs.
Building a new dual-income property can provide you with additional tax benefits over buying an existing one. For example, your depreciation tax deduction will be higher. This tax deduction will also be higher than it would be if you built a single-income property because you will have more items that you can depreciate.
Of course, dual income properties also have all the tax benefits of other investment properties as well. You can depreciate any property-related expense like loan interest, council rates, body corporate fees, property management fees, and repairs and maintenance costs.
If you want to supercharge your return by investing in a dual income property, our expert team at DPN can advise you on opportunities to construct these homes in high-growth areas. Our homes are custom designed to provide maximum investor benefits. We can also help you with dual income property finance and ongoing property management services.
Whether you’re looking to buy your first investment property or you’re an experienced investor looking to expand or diversify your portfolio with a dual income property, we can help.
Contact us today to find out more!
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