Duplex or Dual Key Properties Flexibility with maximised earnings
A standout for the flexibility they offer savvy investors, duplexes or dual key properties are lucrative for achieving a higher rental return (with two incomes under one roof) or the option to build two and sell/keep one (in the case of duplexes).
While duplexes are lesser seen in modern estates and dual-key properties make up a minority portion of developments, they are supremely popular for investors looking to leverage their earnings.
Return and Growth
The rental return for dual occupancy is typically higher than standard house and land packages. With two properties under the one roof, there are two rents to collect, but higher tenant turnover should be considered. A single dwelling house and land property will return 4.4 to 4.9 per cent, depending on location, whereas a dual occupancy property can achieve 5.5 to 6.5 per cent, depending on location (area and state).
From our experience, the Brisbane area has some of the strongest returns with a typical dual occupancy package offering 5.3 to 5.8 per cent returns, based on the area and the purchase price.
Location
The location of dual occupancy properties is limited to key areas, as not all councils and states will allow them.
In Queensland, for example, options consist of the outer suburbs of Brisbane in the Logan and Ipswich Shires, putting you around 20 to 30 kilometres from the CBD. In New South Wales, there are some areas in the Hunter Valley and Newcastle that allow construction of this style of dwelling.
Many estates will have a limited allocation of dual occupancy homes in each project, with the balance of the homes being shared with investors and owner occupier properties.
The Numbers
As an example, a Park Ridge, greater Brisbane, Queensland, dual occupancy property located 22 kilometres from the CBD would cost you approximately $580,000 (in the market as at September 2021).
A typical layout for a dual occupancy property will be a main residence of three-bedrooms, two-bathrooms and a single garage, returning $400 to $410 a week. The axillary unit will be two-bedrooms, one-bathroom and a single car garage returning $360 to $370 a week. The return for this property will be in the vicinity of 5.34 per cent, as at May 2022.