‘Dual Living’ is now a real option which 31% of people are considering.
Realestate.com.au, The Developer Insights: House & Land (March 2018)
What is 'Dual Living'?
A dual living dwelling is essentially 2 completely separate houses built under the one roof, with a single owner. Each ‘living area’ has its own street entrance, different address, separate front doors, separate kitchen, separate bathroom, separate living areas, separate garden. Power, water, gas, NBN and all other services are separately installed into the separate dwellings: bills go to the respective address.
Looking from the street though, the modern solution looks like a single house and shares the 1 roof. Typically one living area is larger (3 or 4 bedroom) and the other is smaller (2 bedroom)
2 SEPARATE INCOMES FROM THE 1 HOUSE PROJECT
When you build a dual Living house you are effectively building 2 opportunities under the 1 roof, you can do as you wish with them when built:
- Rent both separately to different tenants and have 2 income streams;
- Live in the smaller whilst a tenant contributes good rent towards your mortgage;
- Live in the larger whilst a tenant helps you pay off your mortgage;
- Change your mind or strategy over time between the above options.
HIGHER ROI ON THE LAST $100K*
Building a normal house can be a wonderful strategy and will save you money when compared to dual Living. The normal house is still the common option and we build them more. When you switch to a dual living concept you will need a carefully selected block which requires a wider frontage and needs to have fairly parallel sides to the block, because the second living area either makes the overall building wider, deeper or both, depending on the design you choose.
One thing is typically achieved though: the additional approximately $100k will achieve a ‘better bang for buck’ of rental! In a simple example a 4 bedroom house may cost $500k and the rent you will receive may be $430 – $450. Adding the other dwelling adds approx. $100k and earns
you approximately $230 – $250 in rent.
A DIFFERENT PROPERTY WHEN IT COMES TIME TO SELL
Just as you may consider Dual Living, so might a purchaser in the future. They will have the same benefits that dual living offers you. Someone may be able to afford to buy your house because they can offset their mortgage with the rental income: you might get a sale where someone else
In modern developments, most blocks may not able to fit Dual Living and a percentage of people buy Dual Living and many builders do not offer the option. So the number of Dual Living houses in any area is limited. It gives you a more unique solution.
YOU MIGHT GET HIGHER TAX BENEFITS & MORE CAPITAL GROWTH
In all instances your personal circumstances need to be considered: typically the Dual Living option will be positively geared and thus does cause a tax bill on the income from rental exceeding outgoings, but also depreciates on a higher value and may separately incur costs. Yes this comes from a more expensive package, but importantly the more expense you are incurring is based on an extra income flow becoming available.