A duplex is a single residential building that has two homes within it. In most cases, duplexes consist of one overall structure divided into two identical halves by a central wall.
Duplexes can be covered by one land title or can exist as separate titles. The two homes can be sold together or individually, depending on the arrangement.
Each home in the duplex can essentially stand on its own, having its own entrance, driveway, amenities, and other things that a typical home would possess. They would have independent kitchens, bedrooms, bathrooms, gardens, garages, etc. A duplex maximizes the potential of the land without additional holding fees, insurance costs, council rates and other associated costs. It may also increase tax depreciation and returns on investment.
According to Michael Sloan of Better Homes and Gardens Real Estate, there are three main reasons which can make a duplex an attractive investment.
“If the property could be subdivided, I’d say that’s the most attractive thing,” Mr. Sloan
“We have duplexes available and built into the price is the money to get them subdivided when they settle, which gives you an equity uplift because two properties are worth more than one.
“If it can’t be subdivided, as an investor, you get higher cash flow than normal because obviously the return can be multiplied. And if it’s brand new and they’re buying it new, they’re getting a lot more tax breaks.”
“They’re getting two lots of rent and they’re getting double the depreciation because the building is actually bigger as well.”
There is more than a couple of benefits to be had with regards to buying a duplex property as an investment:
Higher cash flow: owning two properties with two tenants renting means you have two streams of rental income, giving you the opportunity to boost your rental income earning potential.
Tax breaks: tax depreciation rules mean you can claim depreciation on fittings in the properties. With twice the number of fittings, you could have considerably more tax breaks. See the Australian Taxation Office (ATO) for more information or consult a qualified tax advisor.
Strata title: If you bought the duplex on one title, you may be able to strata title later down the track, which could allow you to sell each property individually, rather than the whole duplex.
Future proofed family living: Once your children are old enough to move out, they can move into their first rental property – right next door. This not only allows you to stay close, keep an eye on your property and still receive a rental income, but will ease their transition into independent living and adult responsibilities such as paying bills on time.
Unique living situations: If you have a loved one that is beginning to need more frequent supervision whilst still maintaining their independence, a duplex pair is ideal. You can check in for a cup of tea or dinner, and have peace of mind knowing they’re being looked after, while still upholding privacy and space for both parties.
Duplexes can also often have higher resale prices compared to similar homes with a granny flat or detached buyer.
Website: – https://www.koalainvest.com.au/