Understanding the Pros and Cons of Investing in a Duplex Residential Property

09 June 2021

A duplex is simply two individual homes built on the same title. It is different from subdivided land since a duplex optimises the land potential free of added holding fees, council percentages, insurance fees and other costs. In addition, it may raise tax depreciation rates and returns on investment.

Duplexes are some of the most popular dual-income investments, enabling investors to enhance their equity during a short period. They can help investors attain the fast lane to financial freedom.

Pros and Cons of Investing in a Residential-Duplex Property

Pros

• High Yield Investment. If you own a duplex, you own two separate homes on the same block. This makes your property investment both high-growth and high-yield. If you rent both properties, you can select two income revenues, which results in positive cash flow for you plus a high-interest return over time.

Duplexes frequently rent for larger amounts than apartments. If you should decide to live in one of these properties and rent the second one, the rental fees will help pay down your mortgage more rapidly. Also, you can stay updated on matters involving your rental property since you live next door.

• Duplex Building Benefits. There are also benefits to building a residential duplex property. Although it can entail a greater financial commitment, it can also aid in decreasing building costs. It may also reduce stamp duty, holding fees, council percentages and insurance fees while cancelling strata costs and raising tax depreciation rates.

In comparison to traditional homes with granny flats or detached living suites, duplexes usually have greater value for higher resale prices. This is because buyers get the advantages of individual homes with separate kitchens, bathrooms, entryways and utilities.

Cons

• Limited Good Duplex Investments. It can be difficult to locate a good duplex investment deal on the market. First of all, some local councils do not permit duplex building. In addition, not all duplexes will add guaranteed value to your property portfolio.

Although a neighbourhood with plenty of duplexes may look promising for investing, this abundance of duplex properties may lower each one’s market value. The best scenario for a valuable duplex investment is a city area with fewer duplexes than single-family, freestanding houses in areas with steady population increases.

• Higher Maintenance Costs. Since in reality, you own two separate homes when you own a duplex, maintenance fees and associated costs can be higher than those for a unit in a strata-titled residential complex with 15 units. Also, if you decide to move into one of these two duplex units and rent the other, living next door to your tenant may be bothersome.

Your renter may demand repairs at all hours of the day and night, and your privacy may be compromised as well. There are also some tax and financial regulations that may apply to your residential duplex investment. Unless you are an expert at residential real estate regulations, you may want to seek the advice of industry experts.

When you consult our experts at Olympia Homes located in Alexandria, NSW, you will receive excellent advice concerning the pros and cons of investing in residential duplex properties. Our experienced professionals will offer advice and guidance to help you select the ideal duplexes for making wise investments with low costs and high financial returns on each investment.

 

Optimized by NetwizardSEO.com.au