Queenslanders are becoming fonder of duplexes. They offer most of the benefits of a detached house, such as ample space and a backyard, and provide greater flexibility. The second dwelling can serve as a stable source of income, especially in a city that attracts a lot of renters. A property with dual occupancy capability makes it easier to accommodate another family member without compromising privacy.
Furthermore, appreciation is another attractive reason why many new homes in Townsville and Cairns are duplexes. When planned thoughtfully, your newly constructed duplex can increase in value significantly in a short period.
To make the most out of your duplex, you have to think like a long-term investor. Follow these tips to ensure that your property, as an investment, pays off:
Think About Land Content Ratio
The first law of real estate states that land appreciates while buildings depreciate. This rule applies anywhere all the time. That is why it’s wiser to buy a property with plenty of yard space than an apartment.
The land content ratio of a property shouldn’t go below 100% to be considered a good investment. If the total floor area of your duplex is less than the lot size, your property’s value is poised to increase because of good land content. The same can’t be said about apartment complexes where the land is just a fraction of the overall space of the building.
Stay Close to Growth Drivers
Another rule in real estate is “location, location, location.” Wherever you build a duplex, make sure that it’s close to amenities like public transport. Such modern conveniences don’t need to be present upon the construction of your property. For as long as development plans are in the works, land values are likely to soar upon the completion of such projects.
Move Away From Similar Properties
Now, the law of supply and demand. As a property owner, you want renters to outnumber rental properties consistently because scarcity translates to value. An overabundance of duplexes in the area won’t necessarily slow the appreciation of your property, but it might drive rental return down.
Since you’re trying to beat inflation with your investment, you would want to build in a location where duplexes are not that common. Take your time to scout different places to see how different markets look like.
Pay Attention to Quality of Build
The appearance of your duplex should reflect its location. If you build it in an area with great land values, it must be constructed to a higher standard to meet renter expectations. The pressure is moderate in a location with low land values.
There’s nothing wrong with building a stunning duplex in an area that isn’t that popular yet, of course. After all, one of its dwellings will be your place of residence. However, realise that better quality of the build means higher construction costs. Your expenses might be harder to recoup if your land’s value doesn’t appreciate at a fast rate and your property doesn’t yield consistent rental return.
Building a duplex in Queensland is a promising endeavour only when you pick the perfect location and construct the right type of property. Fortunately, an experienced builder can guide you every step of the way so that you can avoid making a regretful decision.