Why Build A Duplex?
Everyone loves to find great deals, whether these deals are on smaller items or big-ticket items like a home. This is exactly why a lot of people wonder what the cost to build a duplex would be. Many developers are tempted by the intrinsic value of getting two homes for the price of one.
It does cost slightly more to build a duplex than a single freestanding home, but it’s cheaper than building two single freestanding homes. Both units are on a single package of land and they bring the potential to create $150,000+ instant equity in less than 12 months. So why build a duplex, how much does it cost to build a duplex and how do you go about it? We’ll outline the answers below!
A duplex is a residential building that has two units under a single roof. The two units share a common dividing wall that splits the building into two separate homes. Also known as dual occupancy, each unit acts as a totally separate home with its own amenities, entrance and yard. Both units can be on a single title, which would mean you would have to sell both units together.
If you subdivide your duplex into two different titles, which is the preferred option for investors, you’re free to sell them individually as single units or keep them and refinance them. This method will also achieve a much higher valuation for equity creation to help fund future projects and purchases so that you can build up your property portfolio, ultimately helping you towards your goals.
Often, people wonder why you’d build a duplex and take on such a project. There are dozens of benefits that come with building a duplex, especially if you use the services of a reputable buyer's agent that will manage the whole project for you, from start to finish.
The main benefits are as follows:
Building a duplex on a block of land instantly increases the value. It can go up tremendously once your builder completes construction. This is known as instant equity. This allows you to control your portfolio and don’t need to wait for capital growth in the market. Our clients are regularly seeing gains of $150,000+ in instant equity in less than 12 months.
Another thing that that spurs people to build a duplex rather than buy a duplex is the opportunity to customise it. You can add linen cupboards, pick your stone bench tops, ducted air conditioning and down lights. You can choose your windows and the entire layout of the duplex to suit the demographics of the area you’re building in, to maximise the return.
Arguably one of the leading benefits of building a duplex is the dual income. Rent from two units. This provides you with positive cash flow, with the potential to earn 7%+ rental yields. This creates a positive geared portfolio. Having an additional income can help you pay off other debts, go on that long deserved holiday or take a break from work.
Choosing the right location for your duplex project is so important to ensure you can maximise on capital growth. And the best part is, you will be gaining growth on not just one property, but on two properties by building a duplex. This will help you create equity within the properties, which you can then use towards a deposit for your next project or purchase, and continue growing your property portfolio.
When you jump into the property market for the first time, building a property gives you a nice introduction to the entire process. Can you build a duplex on your land? Depending on your council, yes you can. This allows you to stay close through the process, and you’re close to your tenants if you choose to rent it out.
Chances are, you’ll take out a loan to afford the cost of building your duplex. Moving tenants into your duplex or into one side of your duplex is an excellent way to get revenue flowing in. You can put your tenant’s rent payment toward your loan payment each month.
Lloyd Edge and his team at Aus Property Professionals have a step-by-step guide showing how they can help you to add a duplex development to your property portfolio. This extensive guide below forms part of our duplex management process for our clients.
Land acquisition
Construction contract
Construction
Completion
There are three main strategies when you secure funding to build your duplex.
A construction loan works in stages. You set up a projected timeline for the build with the lender along with the estimated costs. When you get to the set stages, the lender will release funding for your contractors to keep the project moving. You can borrow up to 90% of the total property value with this type of loan.
They cover up to 90% of your property value but they have strict guidelines. For example, you have to have between 5% and 20% in genuine savings, stable employment and an above-average credit score.
You can take out a traditional mortgage loan to build your duplex. You can borrow up to 90% of the projected value of the property to finance the build. If you have a guarantor, you don’t need a down payment.
It's simple; you want a reputable and experienced buyer's agent on your side to help you with the whole process and it's hard to beat Aus Property Professionals. We excel at getting you the best cost to build a duplex available, and we have the knowledge and experience to help you complete your project within your deadline. We also have an in-depth understanding of why our customers would want to build a duplex and the significant benefits that come with it.
Additionally, we also bring decades of combined experience to each property we work on. We'll work with you to design and build your own tailored duplex, and we have plenty of completed projects in our gallery. No matter if you want a single or double-storey duplex, we can deliver to your exact specifications to help you achieve financial independence through property investing.
Are you ready to build your duplex and you want more information on the cost to build a duplex? If so, we can help. You can get in touch with our staff, and we're ready to set up a complimentary consultation for you! We'll go over why you'd build a duplex, more benefits and the process. All you need to do is ask!
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