What are Dual Key Homes?
Essentially Dual Key Dwellings are two homes in one – An innovative new product that is becoming an increasingly popular choice for investors in the residential market. The dual-living products are providing investors with two rents instead of one, offering a higher rental yield and making this investment cash-flow positive.
Dual Key dwelling, in general, aren't designed to be strata titled. This means you only have one title, one lot of rates, one mortgage and so on. The concept of dual-living consists of two individual self-contained residencies all contained within the one traditional housing design. The residencies can be 3+2, 4+1 or 3+1 bedroom depending on the Council. The dwellings are split by a certified fire wall, which allows the owners to separately rent one or both of the homes to tenants, offering an additional rental income.
Each home has its own entrance and complete facilities such as laundry, kitchen, bathrooms, bedrooms, living area and pavilion. Internally, a fire rated wall separates each residence and provides excellent noise insulation, while externally a fence provides privacy in each back yard.
Various councils have different names for these types of dwellings, such as Dual Occupancy Dwelling, Auxiliary Units, Granny Flats, Associated Units and Secondary Dwellings. These are generally defined by council’s as “a self-contained dwelling that:
. Is established in conjunction with another dwelling (the principal dwelling)
. Is on the same lot of land as the principal dwelling
. Is located within, or is attached to, or is separate from the principal dwelling.”
This new concept of dual-living offers various opportunities for buyers such as:
. First home buyers can relieve their mortgage stress by having an additional source of income from renting one of the dwellings.
. Large families requiring five bedrooms, as well as families living with aged parents or older children are able to do so with these dual living arrangements.
. Investors can achieve a higher rental yield with the two rental incomes, along with the low outgoings, which these dual-living products offer.
Benefits for Investors:
. Two sets of rental income producing a higher yield, which should ultimately make this a cash-flow positive investment;
. Lower risk associated with vacancy periods as there is a secondary rental income;
. No strata fees, as the dwellings remain on the same lot/title.
. One set of council rates and water rates, as opposed to strata titled dwellings.
. Market rents for each dwelling are more affordable to rent than a typical 4 bedroom investment property, which increases the demand for this type of property.
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