Imagine purchasing a house in your ideal location for around 50% of the price you’d pay for a traditional house. Think it’s impossible? Meet the versatile duplex. A duplex is one of the real estate world’s greatest income earners. Buying a duplex allows you to produce healthy rent yields and strong value growth for a much more cost-effective price than what you’d pay for two detached houses in the same location.
How To Buy A Profitable Duplex For Investment
A duplex is a type of residential home that has two units divided by a common central wall. These dual units can be on one piece of land with a sole owner who sells them together, or they can each exist on separate titles and be owned and sold as individual units.
When you plan on buying a duplex as an investment, you have to pay for a building insurance policy for both sides of the building. You usually won’t need a body corporate, but it depends on your council and the home’s design.
Benefits Of Buying A Duplex
Buying a duplex comes with several benefits that make them very popular with real estate investors across Australia. There are all types of investment duplexes for sale, and a good buyers’ agent can help you find the best option for your needs. Lloyd and his team from Aus Property Professionals specialise in duplexes. The biggest benefits include:
Dual Income & Positive Cash Flow
Affordable & Ready To Go
Save On Land Costs
One of the biggest things that can make people leery about actually completing the transaction when they’re buying a duplex is the mortgage. You have to ensure that you have enough money to cover your mortgage payments. You may even want to put more money toward the balance to be able to pay it off quicker.
Buying a duplex as an investment can help offset the mortgage cost, with the potential to earn 7%+ rental yields. You can live in one side to reduce your monthly expenses and move a tenant into the other side. Or you can rent out both units for investment which will provide you with dual income, resulting in a positive geared property. This will free up your own income earnings so you don’t have to stress about money and can perhaps take some time off work to relax or to spend more time with family and friends.
Unlike building a property and waiting for the construction process to finish before moving people in, buying a duplex gives you an established home. They’re usually ready to rent out as soon as you close the deal and the property passes all of the relevant inspections, or they may even be tenanted already giving you cash flow from day one.
Additionally, it’s usually easier to finance an existing duplex purchase if you don’t have enough savings than it is to build a duplex. However, you sacrifice the ability to manufacture equity from the duplex.
You get double income each month from owning a duplex as long as you rent both sides out. In turn, this saves you on land costs or property taxes because it’s technically one building, unless you separately title them. Duplexes don’t take up as much room as two freestanding buildings would, and they are on the same lot of land, hence why it is cheaper to buy a duplex than buying two separate properties.
What Are Your Financing Options?
When you buy a duplex, there are three ways you can finance your investment:
- Traditional Mortgage – You can take out a traditional mortgage as a property investor to finance your duplex. You’ll put around 5%-20% down and pay over a set term. You can negotiate your interest rate with your lender. The better your credit score is, the better rate and terms you’ll get.
- Owner-Occupied Loan – Can you buy a duplex with an owner-occupier loan? Yes! You have to physically live in one side of the duplex in order to qualify for this type of loan. It’s a perfect fit for someone who needs a place to stay, and you can use the tenant’s rent payment toward your mortgage repayments.
- Owner-Financing – Buying a duplex as an investment by using owner-financing is trickier to do, but it’s still possible. Basically, the owner of the duplex acts as your lender instead of a traditional bank. You make your payments to the owner and the property slowly builds up equity.
Which financing option is best for buying a duplex as an investment property? It depends on your situation. If you have good credit and don’t want to live in the duplex, a traditional mortgage may be the most effective route. If you want to stay in the duplex, the owner-occupied loan can offer you significant savings. Finally, if you don’t want to go through a traditional lender, you can choose owner-financing. If you’re wondering how to buy a duplex with no money down, this is an option if you have equity built up in another property, such as your family home..
Why Choose Aus Property Professionals When You're Buying A Duplex?
When you’re looking to buy a duplex, you want an experienced and professional team to help you locate it and negotiate your terms. Lloyd Edge and his team at Aus Property Professionals have hundreds of satisfied clients.
With access to off-market opportunities that are not available to the general public, and the ability to negotiate deals below market value, this gives our clients the opportunity to buy the right duplex, for the best possible price.
We understand how smart it is to consider buying a duplex as an investment. Our buyer’s agents know the markets, and we’re able to quickly and easily narrow the search down to duplexes for sale in the chosen areas.
This knowledge and experience has allowed us to gather a repeat and loyal customer base that return to us again and again for quality results. We have a host of recent purchases showcased to help give our potential customers an idea of what we can do. They show our meticulous attention to detail and our willingness to go the extra mile to find the perfect duplex for our customers’ needs.