Are You Looking To Invest In A Duplex Project?

Are you trying to figure out how to develop a profitable duplex investment strategy? Maybe you’re looking to build a property portfolio, or you want a dual income property that’s cash flow positive, or you want to be able to keep one and sell the other to pay off other debts.

Whatever the reason, building a property to create instant equity is a smart move for first-time and experienced property investors alike. With many of our clients creating over $150,000 instant equity in less than 12 months, you would be silly not to consider this strategy. We’ll outline why having a duplex property is so valuable below and how to avoid the pitfalls in property investment !

What Is A Duplex?

Before we get into why you’d want to own a duplex as part of your investment portfolio, you have to know what a duplex is. Simply put, a duplex is a property that has two units either side-by-side or on top of one another with two separate entrances. This means that when you build a duplex, you build two individual properties set for two separate families to live in.

Building a duplex is one investment strategy that has proven time and time again to be one of the most rewarding real estate investment strategies available. This is especially true for first-time real estate investors to get ahead with instant equity and even for experienced investors looking to add and grow their property portfolio.

Achieve The Trifecta With A Duplex

Equity
Cash Flow
Growth

Building A Duplex

When you build a duplex, you get exactly what you want out of a property. You have to find and buy land before getting all of your contractors and financing together to build, but you can design it however you like and this option will allow you to create much more instant equity.

Aus Property Professionals will do all the hard work for you, from finding suitable land to tendering out the build contract, getting you the best possible deal.

Building a duplex also comes with builders warranty for many years, giving you peace of mind on your investment.

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Buying A Duplex

You get two immediate benefits when you buy an existing duplex, in the form of finance and convenience. It can sometimes be easier to finance an existing duplex purchase, as there’s no holding costs involved and it’s much quicker than building one from the ground up. You can rent it out and start generating revenue at a faster pace.

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There are several reasons why you should consider a duplex including:

Dual Income

Maximising your return on a property is all about generating rental income. When you build a duplex, you instantly double your rental income earning potential. You also get two different options when you build a duplex.

You can rent out both units to provide you with dual income, giving you the potential to earn 7%+ rental yields. Or you can sell one unit to pay down debts such as your own home while keeping the other unit to generate an income. Either way, you will be creating instant equity and have good cash flow, allowing you to move forward in building your property portfolio to achieve financial independence.

Tax Benefits

The good thing about a duplex investment strategy, or any real estate investment, is that it comes with tax advantages attached to it. You can claim instant tax deductions the same year you build a duplex and there are deductions you can claim with the ATO over the years – this is called ‘tax depreciation’. They include advertising, council rates, land tax, water charges, cleaning, insurance, pest control measures, interest, property management fees, commission fees, repairs, general maintenance and buying the property itself.

For more long-term tax benefits, you can claim several things starting a year after you build the property. The most common long-term tax benefits include lender’s mortgage insurance, loan establishment fees, broker fees, initial repairs, depreciating assets, capital works and more.

More Financing Options

An instant equity property comes with more flexible financing options than you’d get with a traditional mortgage. This flexibility makes financing slightly easier to obtain, no matter which lender you choose to borrow from. You can generally split your financing options into three broad categories, and each one comes with benefits.

You can choose to go with a regular investment home loan, an owner-occupied loan if you plan to live in one side of the duplex, or owner-financing. Owner financing requires you to pay directly to the seller instead of going to a traditional bank. Since you have several choices, buying or building a duplex, whether by yourself or with a friend or family, is relatively painless especially if you go with a qualified buyer’s agent to help you source one or guide you through the whole land acquisition and construction process.

Easier Mortgage Repayments

Arguably one of the more stressful parts of investing in real estate if you can’t pay for it outright, is making the mortgage payments. Since a duplex can be turned into an income earner right away, it gives you an automatic cushion for your mortgage expenses.

The benefit of building a duplex is that it will provide dual income from day one, making it cash flow positive.  This means that your rent income will pay for your mortgage repayments and other expenses, helping your serviceability so that you can move on to your next property sooner. Having an additional income can help you pay off other debts, go on that long deserved holiday or take a break from work.

If you are looking for a buyer’s agent to assist you with purchasing a home or investment property in the SydneyBrisbane, and Newcastle regions, please get in touch with Aus Property Professionals here or give us a call on 1800 146 837! We are Australia’s leading equity growth strategists.

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