Both dual occupancy homes and granny flats have a lot in common and in some specific circumstances, they might appear to be practically the same thing. In most cases, however, there are important differences between these two types of dwellings that can greatly affect the type of return you might expect on investing.
Which is the best investment for your hard-earned money and what should you know about dual occupancy homes and granny flats before deciding on which dwelling type to design and build?
Pros and Cons of Dual Occupancy Homes
The first important difference between dual occupancy homes and granny flats is that a dual occupancy home is a dwelling developed on its own parcel of land, usually one that has been subdivided. In other words, a dual occupancy home consists of two properties that may or may not be attached but that sit on separate plots of land.
Pros
- Fantastic potential for high rental income yields from one or both properties
- Both properties may rise in value by quite a bit as dual occupancy homes are quite trendy and practical
- Superb flexibility for long-term living (yourself, children, aged parents and relatives, etc.)
- Subdivision makes dealing with specific matters for one property or the other much more clear and proper
- Often much more optimal designs are possible than granny flats, about property frontage, spacing, easements, etc.
Cons
- The process of subdivision can be more expensive and time-consuming than obtaining permissions for a granny flat
- Similarly, council approval may be more complex and take longer
- Remarketing and selling one or both units can likewise be more complex and thus dual occupancy homes often appeal more to long-term investors, although owner-occupier units aren’t too uncommon either
Pros and Cons of Granny Flats
Granny flats are dwellings that are typically built on the same plot of land as an existing residential structure, so this might be a simple shed (safe for habitation, of course) or a fairly luxurious separate dwelling sitting on the same land as the “main” structure.
Pros
- Usually cheaper since no subdivision is required
- Tend to be much easier to develop once planning permissions have been obtained
- Highly practical for aged relatives, children, or other family members to live in
- If let to a tenant, can return a fairly reasonable rental income
Cons
- Property constraints may be more limiting
- Property value may not go up significantly with a granny flat as investors and buyers may not care much for a secondary unit
- May limit the use of your land in the future since certain minimum frontages must be respected and maintained
Which is the Better Investment: Granny Flats or Dual Occupancy Homes?
Both dual occupancy homes and granny flats can be good investments and both can appreciate your property value and provide rental income. Depending on your needs, both have certain advantages that may make one preferable to the other.
Broadly speaking, for long-term investment potential, dual occupancy homes tend to provide more reliable rental income since both units can be let to tenants, both properties tend to appreciate better, and there’s a lot more design flexibility – once you go through the subdivision and approval process of course.
That process can be a challenge to navigate, so why not leave this task to a reputable dual occupancy home developer such as Trevor Homes?
At Trevor Homes, we provide comprehensive building solutions, including expert builders in Cranbourne who deliver exceptional results tailored to your requirements. Our reliable builders in Croydon are known for their attention to detail and commitment to excellence. With our skilled builders in Dandenong, your dream home becomes a reality.
Trevor Homes
Contact us at Trevor Homes for all things related to dual occupancy homes.
