Will a duplex on my current land be a good investment?
Building a duplex on your current land can be an excellent investment or a great multi-generation home, but there are several things to consider before deciding whether it’s a great option for you and your family.
The first consideration is whether you can build a duplex on your land. Is it the right size and dimensions? Do the council regulations in your area allow for duplexes?
You also need to examine whether building a duplex on your current property is a good investment and review your reasons for building it.
Can I build a duplex on my current land?
In simple terms, a duplex construction is two homes built on the same block of land that share a common wall. The two homes can either share one land title and owner, or can be subdivided into separate titles so they can be owned and sold separately.
The NSW Government’s Low Rise Housing Diversity Code applies to all local government areas in NSW and allows dual occupancies to be approved through the fast-tracked ‘Complying Development’ process. The code applies to properties zoned R1, R2, R3 and RU5 across NSW.
Under the code, blocks must be either 400 square metres or the minimum lot size required by your council, whichever is greater. Blocks must be a minimum of 12 metres wide and buildings must have a minimum side setback of 0.9 metres.
Additionally, the code requires each dwelling to be a minimum of five metres wide, to face a public road, and cannot be located behind another dwelling except on a corner block. Off-street parking must also be provided for at least one car per dwelling.
“Building a duplex on your current land can be an excellent investment or a great multi-generation home.”
Reasons for building a duplex
Now that you’ve established that you can legally build a duplex on your land you need to examine the reasons you want to build a duplex.
Building a duplex can be a good investment in the short and long term as you can achieve a stronger rental yield and capital growth once construction is completed. Building a duplex can also be faster than constructing two separate dwellings.
A duplex can be a great investment
If you’re building a duplex on your current land you will have several options if you’re planning to use it as an investment.
You and your family can live in one half, and either rent out or sell the other side. That way you get to stay in a neighbourhood you know and love but capitalise on the land that your old home once occupied. You’ll also have a smaller garden to maintain.
Another option is to rent out both new dwellings and relocate, or sell both and potentially make more money than if you had sold just your original home.
Duplexes are a great way to share multi-generation living
There’s currently a strong trend towards multi-generational living, particularly in Greater Western Sydney, where property prices continue to rise. And it’s happening in a couple of different ways, with young people staying at home longer, older generations sharing their homes, and several generations wanting to stay close, but not too close.
What you should decide before you invest
Are you seeking capital growth, rental returns, or cost savings by building a duplex? These are the potential outcomes that are driving increasing numbers of Australians to invest in duplex projects.
But before you leap in, you need to consider a few key financial factors:
Your investment objective
You need to establish your investment objectives or your primary goal for choosing to invest in dual-income property.
Perhaps you’re thinking of starting a property investment portfolio to fund your retirement?
Maybe you want to pay off your mortgage in a set time?
Do you want to pool your family’s money or help your children?
Working with an investment advisor can help you set these types of financial goals.
Conduct your due diligence and market research
Look at other similar duplex properties in your area. Are they selling well? How soon after building completion are they going on the market?
What sort of characteristics like size of the dwelling, parking, etc sell or rent well in your area?
Will you be over-capitalising for your area?
You can seek the expertise of local real estate agents as well as experienced duplex builders like ZAC Homes to answer some of these questions.
“Look at other similar duplex properties in your area. Are they selling well?”
Consider your finances
When you consider your finances, you need to factor in costs beyond construction expenditure and mortgage repayments.
If you are planning to rent out your duplex you will need to look at costs involved with hiring a property manager, costs associated with maintenance and repair expenses, as well as being able to handle periods when no tenants are living in one or both homes.
Building a duplex with ZAC Homes
Building a duplex home can be financially rewarding, and beneficial for your family home, as long as you choose the right builder.
Custom-built dual occupancy homes by ZAC Homes are designed to optimise your available space and make the most of your valuable land. We pride ourselves on our exceptional customer service and make the journey of building your new home as fun and exciting as possible.
ZAC Homes builds with trust, respect, integrity and pride, which we work hard to deliver to every client. Call us on 1300 350 793 or send us an online enquiry and our team will work with you to design and build your dream home.