Investing in real estate is a great way to get started and achieve a good portfolio. While there are many options when it comes to the type of property you can invest in, you may want to consider dual occupancy homes.
Dual occupancy homes consist of two dwellings in one land title. They’re either separated by a single wall or completely detached from each other. Of course, there are other factors to consider when investing in dual occupancy homes, but knowing where to invest is a great start to looking for your ideal property.
1. Maximised Rental Income
Since there are two dwellings in one property, you can set various rental arrangements. For instance, you can live in one dwelling and rent out the other one. Another option would be to rent out both dwellings. If you’re in for an investment, renting both dwellings is a game changer.
Whatever rental arrangements you decide on, you can still maximise rental income, especially if your dual occupancy home has a great location and good structure. This means you can have a regular cash flow that you can use to pay your mortgage faster than expected.
So instead of buying a single property with one dwelling, buying dual occupancy homes can help you earn more money. If you have twice as much income compared to a single property unit.
2. Diversification of Tenants
As mentioned, you can have various rental options. If you’re planning to rent out both dwellings, you can decide whether you want a family, couple, or single tenant per dwelling. For instance, you can rent out one dwelling to a family, and the other one to a single tenant. This can help you attract potential renters and avoid having a vacant dwelling for a long time.
On the other hand, if your location is a diverse one, you can also opt to rent out the other dwelling for commercial purposes. However, this may require you to get an additional permit and make further changes to one of the dwellings.
So for starters, you can settle with renting out both dwellings for residential purposes.
3. Low Risk
If you’re just starting to build your investment portfolio, buying a dual occupancy home and renting it out is a good thing to start. Additionally, it offers low risks. As a rental property, it can gain more income and increase its overall value over time.
People most likely buy dual occupancy homes so they can live in one dwelling, and rent out the other. But whatever your plan is, you can still earn money if you rent out at least one dwelling, increasing the overall property value.
When renting out, make sure to offer a wide range of renters options, so that the dwelling won’t take too long to be rented out.
4. Tax Benefits
Dual occupancy home investment offers a wide range of tax benefits. Given that there are two dwellings in a single property, you can be eligible for tax deductions in maintenance costs, mortgage interest, and management expenses.
Usually, the tax benefits vary depending on whether only one unit is for rent or both. Usually, if you want to build another dwelling on your existing property, the construction and other requirements don’t cost as much as when building a dwelling on another property.
5. Versatile Use and Future Flexibility
As mentioned, you have the option to rent out both dwellings or live in one of them. Fortunately, your decisions today can be changed in the future. For instance, if you’re living in one of the dwellings at the moment, you can always rent it out in the future once you find another property.
So if you’re still saving money for the future, living in one of the dwellings in your dual occupancy homes can be a great option. Meanwhile, if one of your relatives needs a place to lie in, you can also halt renting a dwelling out, and resume once you’re ready.
In addition, since there are two dwellings, you can also turn the other one into a bigger dwelling than the one where more people can fit.
Investing in dual occupancy homes is a great opportunity, especially since it’s becoming more popular. In addition, there’s an increase in cash flow, which offers low risks, tax benefits, and versatility.
However, if you’re a beginner in investing in real estate properties, you should work with a real estate agent who can help you find the best property where you can either build a dual occupancy home or buy it as it is.
We hope this article helps you get started in investing in dual occupancy homes. Who knows, maybe someday you can buy multiple properties where you can build more dual occupancy homes and other property options.