Capital growth, rental returns, cost savings – these are the rewards that are driving increasing numbers of Australians to invest in duplex projects. This is not surprising as dual income property can be a great instrument for creating wealth. Depending on your property investment strategy, investing in a duplex can lead to sizeable returns.
Investing in duplex development projects may also be considered cheaper as both units are built on a single block of land. Unlike strata property or subdivided land, you can also save on additional insurance costs, holding fees, council rates and other similar expenses with a duplex.
However, it’s not all plain sailing with duplex investment. Just like any other investment strategy, duplex ownership does come with some hazards. So, to minimise your risks, make sure you avoid the following pitfalls:
If you want to buy or build a duplex, you must have a reason for it, correct? Property investors invest not only for the sake of investing. Therefore, it’s important to have investment objectives or even just one primary goal for choosing to invest in dual income property. You also need to have a timescale for your investment.
So, if you’re seriously thinking of investing any time soon, be sure to ask yourself the following questions:
Remember that selling a duplex can be complicated if you have tenants, aside from having to prepare for expenses concerning getting two separate titles for the units.
Buying a property way below the going purchase price may make you feel like you hit the jackpot. However, don’t be misled by short-term gains that can turn out to be major long-term losses.
This is precisely what happens to certain property that goes back on the market after just a few months of being purchased. This means that the property failed to perform as expected, so the investor is driven to resell to recoup even just part of their investment. Worse still, this scenario is all too common among investors who fail to conduct due diligence and sufficient market research.
You can avoid this by asking the following questions:
If you have trouble finding information, you can always seek the expertise of local real estate agents as well as the local council and knowledgeable, experienced duplex builders.
Aside from mortgage considerations, you also need to check if you are financially prepared to handle tenant-related scenarios in the future. These include hiring a property manager, and considering maintenance and repair expenses, as well as being able to weather those periods when there are no tenants living in one or both units.
If you don’t have a business to help ensure you have adequate cash flow, you should have the security of a stable job. You also need to ensure you have good credit standing or borrowing history that will make you an attractive mortgage candidate to lending institutions. You also need to have some cash saved up as your financial buffer for rainy days.
Property investment is an excellent arena worth exploring as it promises significant financial gains in the long-term; that is, if you invest in the right property – whether it’s a duplex, strata property or standalone unit.
To ensure you reap the rewards you expect, avoid the aforementioned pitfalls before finalising any property deal.