What is everyone's opinion on dual occupancy (established duplexes and Granny flats) properties as part of an investment strategy? Things like capital growth and anything you can think of that is a benefit or con.
From what I can tell:
Pros:
Generally Higher yield due to dual rental income
Cheaper than buying two houses.
Cons:
Possibly less of a tenant pool. Could rent a house if they wanted space, or a unit for low maintenance
Possibly higher risk as one or both could become vacant or increased risk of bad tenants compared to a house
Harder to find
Let's start the conversation.
A property with a granny flat is also likely to attract a smaller buyer pool when you decide to sell up.
Cheers
Jamie
Jamie Moore | Pass Go Home Loans Pty Ltd
http://www.passgo.com.au
Email Me | Phone MeMortgage Broker assisting clients Australia wide Email: [email protected]
I'm a duplex fan, have just bought one in Townsville ( I see u too are in Townsville), great yield, less risk if reliant on rental income as unlikely to have both units vacant at same time. I am in the process of strata titling the property.
Let's talk about the Townsville market, thoughts on market in general? Specific areas or property types? I'm picking up good indicators but as you are probably aware some areas are likely to outperform others.Im a massive duplex fan too. However you need to be very careful with the numbers if the land value is low. The other major factor is the council you that you are dealing with.
Regards
Shahin
TheFinanceShop | Elite Property Finance
http://www.elitepropertyfinance.com
Email Me | Phone MeResidential and Commercial Brokerage
BE VERY VERY Careful in Qld, especially Brisbane City Council Area. I am currently dealing with a large number of Show Cause and Enforcement Notices for what BCC considers illegal uses relating to dual living arrangements
There was a Qld Court of Appeal Ruling which came through in 2012 (ADD Design v BCC). The Court stated that the Definition of a House that the Planning and Environment Court has used for years, although convenient and somewhat practical, is wrong.
The Key part of the judgment is in relation to the term "discrete" individuals or groups or households. The judgement found that a house can not be used by any of these discrete categories. What does that mean, leasing a house and grannyflat out separately or leasing out a house as dual living areas, changes the definition of the use from House to multi-unit dwelling. If you site is zoned low density residential, you will require 3000sqm of site to be able to do this.
I can not see the BCC letting this go, they are trawling real estate listings at present for references to dual living and duplex and going from there.
Sorry to be a bearer of bad news. If you have a dual living, duplex or granny flat arrangement in BCC at present, send an email to my planning address and I will see what I can find out for you.
regards
Darryl
RPI | Certus Legal Group / PRO Town Planners
http://www.certuslegal.com.au
Email Me | Phone MeProperty Lawyer & Town Planner
Jamie M wrote:A property with a granny flat is also likely to attract a smaller buyer pool when you decide to sell up.Cheers
Jamie
Is this for duplexes also? so this would affect capital gains too?
What are the extra costs involved in owning a Torrens title duplex compared to a house?
I would assume rates would be the same as they're calculated on land value. Insurance would be similar too, wouldn't it?
What considerations would you need to take into account if you planned on buying one and then strata titling down the track?
I.e. Seperate water meter and switchboards etc.
I currently have the gloves on with a Council in Bundaberg QLD because of the my house which is a single dwelling home with an attached dwelling. Although the design approval is for a single house with attached dwelling, I am being charged two lots of rates. BE VERY CAREFUL OF BUILDERS that promote dual income properties. They are likely to produce two lots of rates.
What are the extra costs involved in owning a Torrens title duplex compared to a house?
I would assume rates would be the same as they’re calculated on land value. Insurance would be similar too, wouldn’t it?
What considerations would you need to take into account if you planned on buying one and then strata titling down the track?
I.e. Seperate water meter and switchboards etc.If the rates are already on ‘minimum threshold’, then having 2 titles will pretty much double the rates.
Building insurance – depends. Seen cases where insurance were higher but can also recall one case it was smaller(!), we were very surprised and the owner jumped on it.
Strata considerations – fire separation walls, zoning, council policy, seperate water and power, council requirements that they bring up during the process, all that fun 👍😎
Ethan Timor | Aligned Finance Pty Ltd
http://www.alignedfinance.com.au/
Email Me | Phone MeActive Investor & Broker; Based in Northern NSW, servicing Australia wide; Author of '34 Proven Ways to Maximise Your Borrowing Power' (download free from our website)
Also be very careful in the Moreton Bay Shire Council. I know of friends that caught up in a fight between Local and State Council. Builder compiled with State Government Rules but Local council wouldn’t have a bar of it. In the end they got theirs through but I hear there are still hundreds in dispute. Logan and Ipswich City Council have different rules but still letting then, just make sure you choose an area that isn’t oversupplied
Investors can assume that adding a 100k GF will automatically add 100k to the value of the property but this usually is not the case so be aware of possible over capitalization.
Colin Rice | CDR Finance
http://cdrfinance.com.au/
Email Me | Phone MePerth Based Mortgage Broker - Investment Property Finance Specialist | E: [email protected]
It is a dual income is one of the advantages of a dual occupancy home.
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