Dual Occupancy Homes Brisbane are homes that been designed in such a manner as to have two completely separate living areas. Each living space must have a separate entrance, a kitchen, lounge area and bedrooms as well as motor vehicle accommodation. The purpose of this type of property is to create a higher rental income than what would otherwise be achieved with a single occupancy home.
The majority of Dual Occupancy Homes in Brisbane are sold to property investors seeking a higher return from their investment. However, I have seen examples of where owner-occupiers are purchasing Dual Occupancy Home to live in one part of the house and rent out the second living area.
The Difference Between a Dual Occupancy Home and a Duplex
A Dual Occupancy Home is built on a single lot. Where as a Duplex is strata titled with each propefrty hacing it’s own lot number. Duplexes have a much higher cost due to the lasrger lot size required to build this type of property, on average in the Mid $600K range. Returns are also lower ranging from the low 5% range to mid to high 5%. Not as strong a performer as a straight dual occupancy.
The layout of a Dual Occupancy Home
The most common floor plan for a Dual Occupancy Property in Brisbane is 3 plus 2 Bedroom property and a 2 plus 1 bathroom configuration with the 3 bedroom living area having an ensuite. Each property must have its own entrance and accommodation for a motor vehicle.
Positive Factors to Consider
The benefit of this type of investment is the increased income relative to the cost of the property. Prices are generally not significantly higher than building a standard single occupancy property. Yet the average investment property in Brisbane will typically return less than 4% on average compared to a Dual Occupancy Home in Brisbane that can produce from 6 to 7%.
Negative Factors to Consider
The disadvantage of this type of investment option is the restrictions placed upon the tenancy agreement for this type of property. Most councils do not allow for more than one tenancy agreement per lot with the exception being the Ipswich council and some areas of the Moreton Bay Council region. In summary, you cannot build one of these properties anywhere in Brisbane, it must be council approved.
Returns
Let’s look at the cash flow of a Dual Occupancy Property in Brisbane. You can expect to pay around the Mid to High $500,000 for a Dual Occupancy Property depending on location and land size. For this exercise, we will work on a completed purchase price of $560,000. The Loan amount will be set at 100% of the purchase price with an interest rate of 3% and the loan repayments set to interest only. This equates to a repayment of $323 per week.
Our example Dual Occupancy Home in Brisbane will be a standard 3 plus 2 Bedroom property meaning one living area has 3 bedrooms and the second living area has 2 bedrooms.
The 2 Bedroom Living area would achieve a rental return of $290 per week, whilst the 3 bedroom living area would achieve az rental return of $350 per week, giving us a combined weekly income from our Dual Occupancy home of $640.
With loan repayments at $323 per week and income of $640 per week, you have a cash flow positive investment property generating a gross profit of $317 per week $16,484 per annum, with a return of 5.9%
Capital Growth
Capital Growth which his based on supply and demand is always going to be high as there will always be those investors that want the higher income.
