Exploring the Investment Opportunities in a Duplex Development.
If you’re new to developing and concerned about the affordability of your first development, then building a duplex development is often the solution. Duplex developments are a great way for many to experience their first development or investment venture with minimised risk.
Here are the 5 things you should know:
1. Duplex designs are flexible
Duplex developments can be built in two configurations – side by side or house behind house, depending on the shape, size and topography of the site. There are no rules to how a duplex is designed so there is some flexibility in the designs and cost. You can essentially build what you want.
2. Duplexes aren’t just for infill areas
Many developers will look for a sound investment opportunity within an established area. In established areas, generally the existing front house will require demolition and the services to the site upgraded to accommodate two dwellings. The costs for demolition and upgrading the services need to be factored into the feasibility.
The most attractive element of developing a duplex in an established area [infill], is the opportunity for the developer to build a brand new home where they can occupy one and sell or rent the second.
Infill is not the only alternative, as many land subdivisions are now introducing vacant land with duplex development opportunities. With duplex developments becoming more popular as affordability is being challenged, it makes sense for these companies to create opportunities for this type of construction.
The cost of purchasing a duplex block in a subdivision is generally a lot cheaper than purchasing in an established area. This will assist in affordability, allowing developers to create product that can be sold or rented on the market at a more economical price.
3. What are the investment opportunities of a duplex development?
Improving your land by either building two dwellings, or demolishing an existing house and replacing it with two units, generally will increase the value of the overall project.
Establishing the development goals before you start is essential to achieving success. Constructing a dwelling for you to occupy will usually have different specification standards to creating products to rent or sell.
The design and finish of the house should be considered when establishing the goals of the project.
4. If you are going to rent, build for your tenant
If the outcome of your duplex development is to rent one or both of the homes, you will need to establish what area your potential tenant is looking for and what rental income is possible. This will establish how the unit will be designed
Ventura Developments and Multi Living Developments offer a free consultation service so you can see if developing is an option for you. Call (08) 9241 1600.