Back to news overview

Are Dual Occupancy Homes a Good Long-Term Investment?

Are Dual Occupancy Homes a Good Long-Term Investment?

Buying a home in Australia can be a very good long-term investment, but as with all investments, it is always wise to do your own research. One thing’s for certain: depreciable assets, cash under the proverbial mattress, and frivolous spending on trivial pursuits are not exactly good long-term investments, but real estate can certainly be a great way to appreciate value and develop equity over time.

Dual occupancy homes can be one of the best long-term investments for various reasons which will be explained in greater detail below:

Flexible Living Arrangements

One of the biggest advantages to owning a dual occupancy home is the unrivalled versatility with what you can do with both units. Many owners choose to let both units to tenants, while some choose to live in one and let the other to a tenant or they may live in one and let the other to a family member much like a granny flat.

Property owners of dual occupancy homes can choose the best living arrangement for themselves and/or for tenants that can bring in rental income. This makes them ideal for both investors looking to maximise rental income as well as individuals looking for a comfortable place to call home.

Dual Income Streams

When using both properties for rental purposes, investors have the potential to tap into two income streams from both tenants. The rental income can be put towards the mortgage owing, but it can also greatly improve cash flow and generate quite a substantial amount of liquidity as well.

With one or two good, honest, and happy tenants paying their rent regularly, investors can yield a great return on their investment and pay off the mortgage sooner if they so desire.

Location is Essential

Everyone knows the three most important factors for real estate are location, location, and location. Dual occupancy homes can be built in many cities outside of the CBD as well as in more rural, regional areas. Naturally, the process for applying for subdivision and obtaining all necessary permits to develop a dual occupancy property can vary from council to council, but the growing popularity of these properties and the extreme pressure on demand for housing incentivise many councils to grant permits for dual occupancy homes.

This means that it may be possible to build dual occupancy homes in highly desirable areas where demand for rental properties is extremely high, such as Melbourne, Sydney, or Brisbane, for example. Moreover, building in neighbourhoods of these cities where amenities such as schools, restaurants, and more are nearby means that there will be most certainly an abundance of prospective tenants willing to move in.

Long-Term Capital Appreciation

As mentioned in the previous point, developing a dual occupancy home in a desirable area where demand for housing is high and supply may be constrained or limited will typically mean that you can expect a fantastic return on your investment. This can, in turn, help to grow your equity much faster as you should have little difficulty finding quality tenants willing to pay a fair rent which can quickly pay into your owing principal.

It is also highly likely that the appraised value of the home will continue to grow, barring any major real estate bubbles that may occur. Historically, property in Australia has weathered economic storms and has only accrued in value, even in challenging times.

Trevor Homes

Invest in dual occupancy homes with the assistance of Trevor Homes.

Get started