Australia’s different terminologies for Dual Occupancy Property.
Across Australia we have many items that have different names or are even defined differently across our different States and Territories and it also happens in property with Dual Occupancy.
In Victoria a Dual Occupancy has traditionally meant we find a property with a large backyard, apply for Development Approval, Subdivide, then Build the second dwelling. This is a complex process with many possible pitfalls and is generally best completed by experienced property developers. This style of property “Development” also means a considerable amount of actual funds will need to be invested. In today’s markets we also face changes on the lenders funding with the new serviceability assessments making it harder to even obtain approval. Further complications such as each property ending up on its own titled land will mean the lender issue is duplicated as each is on its own title with new loan facilities required for each. This is becoming extremely restrictive on borrowing capacity and even if you achieve this you may find future borrowing capacity beyond this not available.
In the remainder of Australia Dual Occupancy property means two dwellings on one title. Having the two on the same title has considerable benefit. In most situations this is a new residential building with one as the main residence and the second being the auxiliary dwelling. Each are completely self-contained houses with separate meters and services and a firewall between the two properties. This may have future benefit too should Councils then allow these Dual Occupancy properties to subdivide into the future.
The Dual Occupancies in the rest of Australia enjoy associated savings such as utilising just under one loan facility, the lesser build cost rather than of building two separate properties, cost effectiveness of acquiring the land, not needing to pay development approval and subdivision costs. All of this means a simpler transaction, stamp duties savings, significantly higher depreciation benefits, higher rental yields (5.6% to 7% plus) providing a stronger cashflow and it becomes the modern style property. Keeping the purchase in one transaction and ending up with two new dwellings means a simplified investment that has less complications, minimises risk and should not have any maintenance requirements for close to ten years. A key benefit in my eyes is the stronger cashflow means for most it is duplicatable and would provide balance in housing portfolios of most.
If you would like to find out more on Dual Occupancy properties feel free to contact Martin Wyatt of Build Wealth With Property, E: Martin@BuildWealthWithProperty.com.au Or M: 0407 500 158 P:1300 123 468.
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