Forums / Property Investing / General Property / Pros and Cons of dual occupancy properties

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  • Profile photo of markintownsvillemarkintownsville
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    @markintownsville
    Join Date: 2013
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    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.

    Profile photo of Jamie MooreJamie Moore
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    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
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    Profile photo of Rick staRick sta
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    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.

    Profile photo of TheFinanceShopTheFinanceShop
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    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

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    Profile photo of RPIRPI
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    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

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    Profile photo of markintownsvillemarkintownsville
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    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?

    Profile photo of markintownsvillemarkintownsville
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    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.

    Profile photo of AlAl
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    @kefeloubolo
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    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.

    Profile photo of Ethan TimorEthan Timor
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    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
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    Profile photo of InvestwellInvestwell
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    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

    Profile photo of Colin RiceColin Rice
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    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
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    Profile photo of MaineMaine
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    It is a dual income is one of the advantages of a dual occupancy home.

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