Dual Income Properties: What are they and why should you invest?
    • 20 June 2022

    Dual Income Properties: What are they and why should you invest?

    Dual income properties are a great choice for investors who want to get ahead in their property investment journey.

    These properties comprise a single piece of land with two rental yields under one title. The most common situation we see is where a standard house is split internally into two separate dwellings that are separately rentable but there are other configurations.

    As an investment, this means that you will be making excellent cash flow with two rents instead of one. Your tenants will be treated separately - exactly as if you were renting out two different properties, even though it’s all on the same piece of land. This method is fully council approved and does not require Body Corp fees.

    Dual income properties are a great way to maximise your cash flow, which you can then put to work reducing your own mortgage or your investment property debt. They are a smart solution to the growing demand for houses that are both affordable and close to urban centres.

    Is a dual income property the same as a duplex? This is a common misconception, but duplexes and dual occupancies are NOT the same thing. Duplexes are two separate dwellings built on subdividable land which have two separate titles - meaning they can also be sold separately. They have approximately double the building cost of a dual occupancy property.

    A dual occupancy property is built under a single title and cannot be sold individually, but is much more affordable to build (and buy) as you are essentially paying for one dwelling.

    Why investors love dual income properties Now that the word is out, these properties are in high demand. Investors are gunning for dual income properties due to a range of factors, but the rental yield is number one. When it comes to doing your due diligence on property market research, rental yield is one of the biggest factors to consider. On a dual income property, you could be making positive cash flow from day one (even as interest rates rise) instead of having to put their your own cash to holding the property portfolio.

    The benefits of a higher rental yield are plentiful - better servicing at the bank, higher borrowing amount, and less strain on personal debts. This extra cash flow could also be used to prop up other negatively geared investments and strengthen your overall portfolio. Alternatively, this extra cash could go into funding your next property investment.

    Dual income properties also have a higher amount of depreciation, as the property usually has two stoves, two aircons, two garage remotes etc. With higher depreciation costs, your tax benefits may also be greater, which increases your tax credit and cash flow.

    Capital Growth should not be counted out as these properties are also in high demand on the open market as they have many uses for someone wanting to live in or own a dual occupancy house. These properties are very attractive and versatile homes to own, with many uses for the small unit including a guest unit, granny flat, office, Airbnb, or teenage retreat.

    Why renters love dual income properties We get many questions regarding the rentability of dual income properties, and whether they are realistically going to be of interest to tenants.

    Dual income properties are in high demand with renters for a couple of reasons. Primarily, it allows tenants to live in a property that is financially accessible. They aren’t paying for a huge block of land because that's the only thing that is available to them.

    We are usually asked by investors – will the smaller, one bedroom unit rent? In fact, the smaller rental of the property is usually the first to go. Older people love them as they can simply drive off the street into their own little garage and house without climbing 3 flights of stairs to a unit.

    Young singles or couples are also keen for homes that are street side in regular neighbourhoods, but often struggle to find appropriately sized and priced properties. Smaller rentals are bound to get snapped up quite quickly, with larger rentals in areas close to the city following.

    Dual income properties allow the tenants in both properties to have their own streetside property with a seperate entrance, garden, parking, and alfresco. In these properties tenants don’t have to pay extra for things they don’t need but are still able to have their preferred lifestyle instead of being forced into an apartment block.

    How Property Club can help you invest in a dual income property The team at Property Club are seasoned professionals in all types of property investment. We have been helping our members buy Dual Income Properties for many years as they are a great property investment for anyone looking to strengthen their portfolio. Our experts can run the personalised cash flow analysis with your numbers to show you the true cash flow positive benefit of this property type.

    We currently have dual occupancy properties available in Adelaide, Brisbane and Perth in different locations and at different price points. Property Club mentors have helped so many people achieve their potential and prosper in the property industry, and we know we can help you too.

    We can walk you through council policy in your area, set you up with trusted builders and developers, and give you resources that will keep your investment on track. Get in contact with us today to discuss how you can start your dual income property journey.

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