With so many options for people looking to get into property investment, it’s sometimes hard to know where to start. But have you ever considered that the answer might lie in your own back (or front, or side) yard?
That’s right, perhaps your property investment solution is dual occupancy. This is where you subdivide the block your current house sits on and build a new house. You can then either sell this new home or rent it out. Suddenly you’ve made a return without even leaving home!
How do I know if dual occupancy is for me?
Well, firstly, you need to consider if it suits your lifestyle. Obviously, by subdividing your block you’ll be losing a sizeable chunk of your garden. The benefit of this, however, is less maintenance – perfect if you’re approaching retirement and you want more time and energy to enjoy your free time.
You also need to think about whether your block is suitable for the construction of a second home. You’ll need to consult a surveyor, but in terms of the basics, you need either a wide street frontage, or dual access to the block. You also need to consider the logistics of having services connected. For example, the connection of sewerage and storm water may require access to neighbouring properties depending on the location of mains.
Then there are the council regulations. Does the zoning in your area allow for dual occupancy? Before you even consult the council, take a drive around your suburb to see if there are any other sub-divided blocks around. This will give you a good indication of how easy your council application will be. Perhaps even knock on a few doors and talk to people who’ve been through the process.
How profitable is dual occupancy?
If you decide that dual occupancy is a viable practical option for your block of land, you’ll then want to consider the return on your property investment.
There are some tax benefits of building a new home on your existing block, including avoiding capital gains tax and GST. If you build a new home and live in the new one as your primary residence and sell your old home, you won’t pay capital gains tax or GST. Plus, you’ll have a beautiful new home with very little maintenance in a suburb you love! Find out more about this option.
Or, if you choose to rent out the second home on your block, you might benefit from negative gearing. This happens when the amount you borrow to invest in an asset that produces income (e.g. a new home) is more than the return on that asset. Get the facts on negative gearing.
Of course, everyone’s financial circumstances are different and it’s best to consult your financial advisor to gain the best return on your property investment.
Dual occupancy can be a wonderful investment choice, but it does take a lot of planning, organisation and liaising with surveyors, council, etc. That’s where choosing a reputable builder like Jones Homes for the construction of your dual occupancy makes great sense. Contact us at Jones Homes to find out more.