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Buying an Investment Property: Duplexes
Simply put, a duplex is two properties on one title (with each unit generally a 3 bedroom, two bathroom offering) that are joined by a common wall.
In most cases, after completion you can subdivide the development and each property will then be on its own title. This often creates instant equity as you started with one block of land and now you have two! Yes, it really is that simple.
Below is an example floor plan of a duplex:
BIG Property Investments recently finished 5 duplexes in Miles, QLD – and they were a great success!
The total cost for these properties in April 2012 was $575,000. Unfortunately the land took 18 months to register but the build itself was less than 5 months. The great news is a client has recently sold one unit for $410,000.
That is a profit (based on selling both units) of $245,000 in less than 24 months!
They are also more than $20,000 a year cash flow positive which means that's the amount of money you take away from the project AFTER costs have been deducted.
Happy Clients? You bet! – If you're looking to review a client's experience on a Miles Duplex BIG Property Investment project, read this happy customer testimonial.
#1 – Duplex homes have a lower barrier to entry.
Buying one side of a duplex is a great entry point for a first time home buyer or someone who needs a more affordable entry point in a certain market. On average a duplex unit is more affordable when compared to single family home with similar number of beds and baths, square feet and condition.
#2 – Duplex homes are homes with cash flow.
Buying a duplex and occupying one side gives you the ability to have a cash flow positive investment while having the use of a home. Remember, this cash flow is in addition to the affordability advantage you have from living on one side of the duplex. These cash advantages can take care of various expenses.
#3 – A duplex home gives you faster home equity.
If the goal is to earn home equity then living on one side and renting the other side provides you with the ability to make double mortgage payments each month effectively halving your mortgage term. This reduces the interest paid and accelerates your home equity which can be borrowed against if needed.
#4 – Duplex homes allow for unique living situations.
The duplex housing style opens up options for unique situations. Say for example you need to take care of someone in your family who needs close supervision, but is also a situation where both parties, you and your family member require privacy and space. Living on one side and having your family member live on the other side, solves that dilemma.
#5- A duplex home gives you a great rental for the future.
A great aspect of buying a duplex and living on one side as your first home is that when your ready to move to your next property, you will have a ideal rental property. Not only will you have the knowledge of running a property but you will also know how it feels from both the landlord and tenant perspective.
WANT US TO BUILD OR FIND YOU A DUPLEX? - Contact Us