Savvy duplex strategies to set you up for life

Whether you’re dreaming of an affordable first home, contemplating downsizing, or perhaps you’re curious about building to invest in the property market, a duplex could be the perfect solution to any one of these scenarios.

Something for everyone

With the nationwide demand for more diverse and affordable housing options – and local councils encouraging infill housing as part of their housing strategies – there has never been a better time to consider the exciting advantages of a duplex property investment strategy. From the experienced investor to the first-time home builder or those looking for additional income in their retirement.

Duplex basics

For those new to the concept, a duplex is two separate homes or units within one structure. Duplex designs include a shared common central wall but have their own entrances and amenities. These two dwellings can either exist on one land title and be owned and sold together, or exist on separate titles and be individually owned and sold. 

One of the obvious benefits of a duplex is that it maximises the potential of the land.  Other advantages of building a duplex are that building costs are reduced, so too the stamp duty, and insurance costs. 

Home Builders Hunter Valley

The many possibilities

If you’re keen to build an investment property as either a first-time or experienced property investor, a duplex is a great option to consider. If generating investment income is your focus a duplex offers double your rental income earning potential when you choose to rent out both units.

For the first time buyer, a duplex allows you to build to live in one dwelling while renting out the second to achieve an ongoing return. The other choice is to sell the second dwelling after a period of time to create cash flow or reduce the mortgage of the unit you live in.

If you build a Torrens title duplex, you’re effectively subdividing your single block into 2 separate lots with separate services therefore increasing the value of your investment immediately.  A strata title subdivision also allows you to sell each unit separately but both units share services and often common land.  

The duplex downsize strategy

For those retirees ready to say goodbye to the endless maintenance that comes with the old family home and garden, a duplex can be a great way to downsize. The sale of the family home can be committed to a duplex property investment strategy. There are plenty of duplex designs allowing you to plan a home to suit your retirement lifestyle. The second dwelling could be sold to turn a profit or be rented out to generate an income. 

Tax advantages

There’s also an array of tax benefits that come with a duplex property investment strategy right from the first year of building. Over the years, you can claim ‘tax depreciation’ in the form of various deductions, including things like maintenance and repairs, insurance, property management fees and water charges. The list is extensive so it’s wise to seek the advice of a financial advisor to ensure you get the best return on investment.

Retirement on your own land duplex dual occupancy Hunter Valley

Have a clear investment strategy

While there’s a multitude of benefits that come with building a duplex, the most important first step is to determine whether your financial situation matches your duplex property investment strategy

A duplex can offer a high growth and high yield investment, but with that comes a higher financial commitment than just buying an existing house or even a house and land package. A duplex build might require you to service a large loan so you need to be realistic as to how far you can stretch your finances.

In recent years, across the construction industry, home builders and investors have had to face the reality of significant increases in building prices. On top of this, there’s been the added strain of rising interest rates increasing monthly loan repayments. It’s crucial to be realistic about how far you can stretch yourself when choosing to build to invest and remember that the money you’ll earn from renting out your property won’t come until that property is built so ensure you have a good buffer, and then add a bit more just to cover the unexpected.

Be clear on where you need further information and seek support. 

Find the right builder to bring your duplex dreams to life

Once you’ve done your research, arranged your finances and you’re ready to build an investment property the next step is to find a recognised duplex builder with a range of duplex designs to suit your budget and block of land.

Of all the duplex builders Newcastle has on offer, Valley Homes is the one with over 50 years experience in the construction industry and a trustworthy reputation to match. Valley Homes has the knowledge and experience to ensure your build will meet local council regulations and zoning. 

Valley Homes’ duplex designs are diverse and fully customisable, can be single or double-storey, and can accommodate a range of block sizes. We’re here to help you find the best strategy for building a duplex that you can be proud of. Contact us today.

Note: The information provided in this article is general in nature and does not consider your individual financial situation, so be sure to understand any tax implications and consult your accountant for further advice.