7 reasons to build a dual occupancy home
When you turn one home into two, greater land value, extra income and a tidy retirement nest egg are just some of the potential wins.
If you’re ready for a home upgrade and like the idea of property investing, staying on your block and building a dual occupancy home could be the key.
Paul Ryan, economist at realestate.com.au, says taking a block with one house on it, knocking it down and building two — attached in a duplex style — is an increasingly popular move.
“I think it’s just more aligned with how people like to live at the moment,” Ryan says. “There are a lot of houses with large blocks close to the city and it makes sense to have two families living on them rather than one.”
While dual occupancy homes have a lot going for them, starting from scratch is a big decision. Here are seven reasons why it might be right for you.
1. Maximise land value
A block of land has value if it’s home to one house, but the same size of land can be worth more to the owner if it’s allowed to have two homes on it. This means that using your existing block to build a duplex could really help to maximise the value of your land, explains Ryan.
“For blocks that are big enough to be subdivided, it can become very profitable,” he says.
2. Generate income
Building a dual occupancy home can also be a great way to generate extra income without the need to buy a new property, explains Alexander Haddon, regional sales manager at Metricon.
“Whilst existing property prices are moving faster than we’ve ever seen, it’s a great way to ride the capital gain wave and upgrade without having to contend with the height of a competitive market.” Haddon says.
“With a slightly higher investment than the traditional free-standing home, you’re getting a tangible, great value investment and a new home in one.”
Haddon says the most common path is for clients to lease one side and live in the other. However, if land zoning allows, a Torrens title subdivision opens up the option to sell or lease.
3. Potential tax benefits
Building a duplex can also have potential tax benefits. Haddon says it’s worth discussing your financial circumstances with experts as part of your research and planning process.
“There can be specific tax benefits to be explored such as purchases through self-managed super funds,” he says.
“We highly advocate speaking with your financial adviser as part of the feasibility process.
“We’re happy to have that chat with our clients on an individual basis and help connect them with the right advice they need. It’s not a one-size-fits-all and there are many ways to achieve success from the project.”
4. Build a retirement nest egg
If you’re looking forward to a great lifestyle in retirement, building a dual occupancy home and funding it through a self-managed super fund could boost your retirement nest egg, Haddon explains.
“The ‘live and lease’ model, where you would live on one side and rent the other side out, is exceptionally popular for downsizers and those moving toward the maturity of their nest egg,” he says.
“The rent can work to fund the mortgage or repay the self-managed super fund. It’s commonly used to assist and provide justification to the dual occupancy option by offsetting the slightly higher capital injection required compared to a single dwelling build.”
5. Cater to changing family needs
As you and your family’s circumstances change, building a duplex can suit various stages in life, says Ryan.
“If people are downsizing, the kids have moved out, or if you want to build a granny flat, this would definitely tick some boxes,” he says.
It could also suit professionals looking to kickstart their property portfolio.
A dual occupancy also opens up a variety of multi-generational living options, such as for parents looking to help their kids break into the housing market, or for grandparents moving closer to their grandchildren.
6. Affordable approach
With capital city property prices up around 20% over the past 12 months, capitalising on the land you have and building a home that better suits your needs might be more affordable than moving, says Haddon.
“This gives you the opportunity to stay in your current area, more than likely in a great spot, and rebuild a whole new modern lifestyle without having to battle the current market,” he says.
“Ultimately, your dollar can go further when you’re alleviating the risk and expense of buying and selling.”
7. Expert-led process
Ryan says to remember that it does take organisation upfront.
“You’ve got to apply for building permission, you have to rent out a dwelling — it has the potential to be cheaper, but it also involves work,” he says.
Haddon adds that the process with DualOcc by Metricon is designed to be smooth as possible
“We surround our clients with the right advice and help throughout each step of the journey,” he says.
“At DualOcc by Metricon, the team take time to understand your goals, the logistics of your block and local council requirements. We encourage the unbridled vision and draw on our expertise to piece it together.
“Through an engaged process, we take the time to understand exactly what our clients wish to achieve, provide the right advice and lead our client through a journey of educated decisions.”