Property investors are always looking for where to invest and maximize their returns while minimizing risk. One strategy that has always worked over the years is dual occupancy developments.
Dual occupancy properties offer a wide range of benefits that make them an attractive option for investors. Some of these benefits will be explained in subsequent paragraphs. Read on:
Benefits of investing in dual occupancy properties
tential for double rental income makes dual occupancy properties attractive for investors. Unlike a single home on a block, a dual occupancy development allows you to have two separate streams of rental income. It could be from two detached homes, a duplex or a main house with a secondary residence. With this kind of set-up, investors can achieve:
- A higher yield compared to a single housing unit
- More financial security, as the rent from just one property can cover expenses even if the other one is vacant
- They can attract different types of tenants, such as large families in one dwelling and young professionals in the other.
Increase in the property’s value and capital growth
A well-designed dual occupancy development can increase the value of a property. By adding a second building, investors can turn one asset into two, thereby increasing the value of the entire property. Also, some investors choose to subdivide and sell one of the properties while keeping the other. This allows them to recover the initial cost they spent on completing the project, reduce debt and hold onto a valuable income-generating asset for as long as they want.
As land becomes scarce in cities like Melbourne, a well-located dual occupancy property is likely to increase in value over time.
It offers lower risk and higher flexibility
Investors love dual occupancy properties because of the lower risk involved. Unlike a single investment property where if the property is not rented out, it can mean a complete loss of income. Having two buildings on one block reduces this risk. Also, there’s higher flexibility with how the property is used. Investors can rent out both buildings for maximum cash flow. They can live in one and rent the other or they can sell one and keep the other as a long-term investment.
It is more affordable than buying two separate properties
Instead of buying two separate properties in different locations, investors can develop one site into two homes, often at a lower cost than buying another block of land. Also, it reduces the cost of construction and maintenance making it a more cost-effective option.
Conclusion
As a property investor looking to get more in rental yields, capital growth and financial security, dual occupancy developments are a great way to start. If you’re considering dual occupancy investment, now is a great time to start and explore every available option. The most important thing is getting the right location and making the right decisions on how you want the project to play out. Once you’ve been able to achieve that, investing in dual occupancy properties will be the best investment you’ve ever made.
