All investments are made to accrue over time, some shorter, some longer term. There are always varying amounts of risk involved with any investment and there’s never a 100% guarantee you’ll see an ROI (or in the amount you anticipated). Still, some investments tend to be safer than others.
Property, particularly dual occupancy homes, have long been one of the safest stores of assets, although they’re almost always a long-term investment and the risks that come along with property ownership are quite different from other financial instruments like stocks and bonds, for example
How well can a dual occupancy home maintain its equity and how well can it grow in value over time?
A Question of Supply and Demand
Supply and demand dictate markets, and the real estate market is no different. The supply of new homes is somewhat inelastic and sluggishly growing, certainly not fast enough to keep up with rampant demand from immigration. The result is an equilibrium point whereby prices are high but creating new supply is challenging yet worthwhile.
Dual occupancy homes are quite trendy because regulatory changes are making it generally easier to subdivide and develop plots of land into dual occupancy homes. This frees up valuable space and allows for medium-density living, something sorely in demand right now and for the foreseeable future.
It’s important to keep in mind that many dual occupancy homes are located in the suburban neighbourhoods of most Australian cities – not in the CBD nor the rural countryside. This geography makes them extremely sought after by families, people wanting a quieter community away from the big city life but not too far away from amenities, and perhaps a little green space for a garden or a nice leafy tree.
Better Long-Term Rental Yields & Property Values
Recent analysis from Southeast Queensland in 2024 on dual occupancy homes revealed that gross rental yields ranged from around 6 to 8 per cent when occupied by long-term tenants and anywhere from 15 to 20 per cent for short-term occupancies. Even with long-term tenants, that’s quite a bit better than what most can expect to make from the stock market with a diversified portfolio, all the while that income can be put towards the home’s equity. For short-term lettings, the market is booming and can be quite profitable, but it also tends to require quite a bit more work when working with platforms like Airbnb, for example.
The same study revealed that dual occupancy homes resold for approximately 12 to 15 per cent more than other dwellings in the same area. This just confirms what many investors have been suspecting for quite a few years now: dual occupancy homes tend to hold their value very well and make for solid investments.
How to Maximise the ROI on Your Dual Occupancy Home
Whether building a new or replacing an existing larger home built by the Builder generation, a dual occupancy home can be rife with opportunities for many investors either as a place to live permanently, a place to let out to tenants, or many other arrangements.
To maximise the ROI on your dual occupancy home, it’s essential to build something that is appealing inside and out, complete with modern amenities and in an appealing location.
At Trevor Homes, we proudly deliver exceptional building services across Melbourne, including builders in Avondale Heights, where modern design meets unparalleled craftsmanship. Our skilled builders in Bayswater are dedicated to transforming your vision into reality. Whether you’re in need of trusted builders in Berwick or experienced builders in Braybrook, we ensure superior results tailored to your needs.
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