With Australia’s property market running red hot over the past two years, first home buyers and investors alike may consider turning to one of the property world’s unsung heroes - the duplex.
A duplex is a single building that has been constructed to contain two separate homes that share a common central wall. The pair of homes will either exist on one land title and be owned and sold together, or exist on separate titles and be individually owned and sold.
Each of the residences will have their own front door, kitchen, amenities, basically any features you might expect from a freestanding home. They’ll typically have a different mailing address, like 1A Duplex Street and 1B Duplex Street.
Owners of the duplex must agree to a building insurance policy that covers both homes.
When it comes to a duplex, body corporate is not usually needed, although this depends on the age of the duplex and its jurisdiction. It’s important to check relevant state and territory guidelines for duplex properties before jumping through the hoops of a purchase.
A duplex differs from a freestanding house, given a house is in essence one dwelling under a single roof. In a duplex, the two dwellings share one common roof, but are entirely separate entities with their own entrances and amenities.
Duplexes come in all shapes and sizes but most commonly are single storey properties, with the common wall vertically splitting the property. It’s important to note this split does not have to be equal, meaning one property could be a four-bedroom home while the adjoining property could be a one-bedroom home.
Given the duplex is two separate homes on a singular block of land, whether you purchase one or both sides of a duplex depends on the building’s title. If the duplex is arranged as a strata-title, the opportunity lies to purchase and solely own one side of the duplex. On the other hand, if the duplex is not arranged as a strata-title property, both homes must be sold in tandem.
As an owner-occupier buyer, a primary benefit to purchasing a duplex is the price tag which is often up to half of what you’d pay for a similarly located detached home. This provides an incentive for first-home buyers to break in to the property market, whilst also assisting those on a moderate budget, or anyone wanting a low-maintenance lifestyle in a premium location, such as retirees and down-sizers.
Buying a duplex as your first home is possible, however you will need to make sure you meet your state or territory’s eligibility requirements for the grant.
Read more: What is the First Home Owner Grant?
Purchasing a duplex as an investment means the potential lies in receiving two rental incomes from one asset. This is attractive for investors as owning a duplex means you’ll be able to earn almost as much rental income as you would from two detached houses while potentially saving thousands on land costs, as a duplex requires much less land than two detached houses.
As with any significant purchase and given the state of Australia’s property market, it’s important to weigh up the pros and cons of purchasing a duplex before committing to a sale.
If purchasing a duplex sounds like a great way to break into the property market or diversify your property portfolio, check out our range of low-interest home loans for both owner occupiers and investors.
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