Imagine buying a duplex on your own land at about half the price of a house. Think we’re joking? Think again.
For a much lower price than two similarly situated detached houses, duplexes often produce strong value growth and healthy rental yields.
Here’s a full explanation of how duplexes compare to other types of property and which one could be a better investment.
In a duplex, two homes are joined by a common wall and either exist on a single land title and are owned and sold together, or they exist on separate land titles and are owned and sold separately.
A duplex’s owners must agree to an insurance policy covering both sides.
It depends on the age and jurisdiction of the duplex whether a body corporate is required.
For more information, contact the relevant authority in your state or territory.
How do duplexes and houses differ?
The difference between a house and a duplex is that houses only have one dwelling, whereas duplexes have two dwellings, each with its own entrances.
Is it possible to own half of a duplex?
If the duplex has been divided into two separate titles, you can only buy one half if they are on the same title.
What are the benefits of buying a duplex?
If you are an investor, buying a duplex means you’ll get two rental incomes from one property. If you’re a regular buyer, buying a duplex has several benefits.
Building one means you’ll earn almost as much rental income as you would from two detached houses, while saving thousands on land costs, since a duplex requires a lot less space than two detached houses.
If you are a regular buyer, the main benefit is the price tag, which is often half of what you would pay for a similar detached house in the same location. Those seeking a low-maintenance lifestyle in a premium location, such as retirees and downsizers, will be pleased with this news.
“This means you can either get into a better location for cheaper than buying a house in the same area, or, to put it another way, you can buy a house with your own strata land instead of buying an apartment in a similar area without land,” says Eureka Buyers Agents’ Nicole Marsh.
Marsh gives the example of a client with a $700,000 budget who wants to buy a house in a prestige waterfront suburb like Burleigh Waters.
It’s almost half the price for this client to buy a duplex in this premium suburb for under $400,000.
There are also the following perks:
A single adjoining owner rather than a large number of neighbours;
As there is only one duplex neighbour to consult, it’s potentially easy to make changes to your own home;
Marsh says living next door offers the security benefits of having a close neighbour without living “in each other’s pockets.”
Since you own your own land, you don’t have to give away pets;
Absence of body corporate fees could boost rental income;
Your garden requires little upkeep since you own a half-block (300-400sqm rather than 700+sqm).
The benefit of saving lots of money must be weighed against the reduction in privacy.
The following are potential pitfalls:
According to March, duplex configuration is crucial – “I don’t like duplexes with one unit at the back as the back neighbours might walk past your bedroom windows at night” – side-by-side or corner units are better;
Consider buying in an area where duplexes are the exception rather than the rule;
To maximize value, avoid duplexes with different front facades.
Depending on the location, Momentum Wealth’s Damian Collins also believes duplexes are good investments.
A duplex property in the right location can definitely be a good investment option for the right client.
Traditionally, properties with a higher land component value appreciate faster than properties with a lower land component value. People often compare duplexes to apartments.
There are also some downsides to investing in duplexes, according to Collins.
“If you own only one duplex, you are often restricted from doing external work to the property since it is a strata complex. This limits the ways you can make the property more valuable,” he says.
In order to make a great duplex investment, you need to do thorough research, just as you would with any other property you buy.