Investment properties in Australia are a hot commodity; not only can you increase your real estate investment portfolio, you can also use your investment property to garner additional income for your family. One of the ways to accumulate an investment property is to buy or build a duplex or other dual-occupancy property. A dual-occupancy residence can be detached or semi-attached, such as an apartment over the garage or a separate building on a piece of property. When building a duplex, tips and advice from those who have been in your situation prove an immense help to you before and after you begin the process of construction.
Know the law
Building a duplex, or granny flat, requires knowing a bit about real estate law. You cannot build any structure without the proper permits and you should never build any structure for investment purposes without first checking with an accountant regarding the tax you are required to pay upon sale of the duplex or on the money you earn as rent from the duplex.
Meet all council building requirements
In addition, your duplex must meet all structural, height, floor space and other relevant and required restrictions before it can be built. This requires making a blueprint of the structure and including all relevant details of the building. You can, however, add on to an existing structure to turn it into a duplex or build an entirely new structure on empty land.
What will you use the duplex for?
Before you begin construction on your duplex, there are a number of other factors you need to keep in mind. The first is what you plan on using the duplex for. Many people commonly take advantage of these granny flats as a way to care for elderly family members.
The addition of a granny flat, or duplex, gives you the space and privacy you desire as well as the proximity required to take care of your elderly parent or grandparent. Others use their granny flats as an apartment for recent graduates looking to move away from home for a little more privacy; since many graduates cannot afford a place of their own until school is over and jobs are secured, parents are letting their kids stay in their duplex while they go to school. The situation is a win-win for both parents and their adult children.
Your other option is to rent out the duplex to someone outside of your family. This method of investment generates income for you by renting the granny flat to someone with a contract requiring them to pay a set amount of rent each month.
Why choose a duplex?
Duplexes add value to your home when you decide to sell. The addition of a separate living quarter is something buyers look at as an upgrade, which also allows them to use the structure for investment purposes much the same way you do before choosing to sell your home.
These dual-occupancy homes are perfect for investment reasons, in-laws, visitors, elderly relatives or your kids when they are old enough to move out of your main residence.
Tips and considerations
Now that you have made the decision to build a granny flat, or duplex, on your property you need to adhere to a few tips and tricks. The first one is that you always include the necessary accommodations to the duplex. You will get more money and more potential renters based on the amenities in the duplex.
Additionally, the structure cannot be considered a duplex if it does not have a bathroom, kitchen and living area. You can make the structure a “studio” type building, which has a bathroom and kitchen and the rest of the living area is used as a living room, dining room and bedroom. However, the large your duplex, the more potential renters you will have. At least one bedroom will net you far more in monthly rent than a studio type duplex.
Another consideration is access to your house. If you are attaching the duplex to your house and using it as a rental or investment property, you don’t want your renters having access to your home, which means you need to ensure the duplex has an exterior door of its own and no access to your home.
Consider using building materials that are sturdy and visually appealing. Pain the duplex a neutral colour that most people will find attractive. If you plan on allowing children or pets to live with their families you might consider a hard floor such as wood or tile and avoiding light color carpets that are easily dirtied and stained.
Speak to the right professionals
Always get advice from the right people before building a duplex! Talk to your accountant, conveyancer, solicitor and mortgage broker. They will help you make informed decisions.