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A dual income property is essentially a property that is generating two income streams by way of two living spaces (attached or detached) under separate rental agreements. A common scenario is a granny flat behind the principal house.
Dual income properties are marketed as high rental yields and attract investors looking for a strong cash flow in an increasingly competitive market like Adelaide. However, like any other type of investment strategy, it isn’t without risks.
A dual income property is essentially a property that is generating two income streams by way of two living spaces (attached or detached) under separate rental agreements. A common scenario is a granny flat behind the principal house.
Dual income properties are marketed as high rental yields and attract investors looking for a strong cash flow in an increasingly competitive market like Adelaide. However, like any other type of investment strategy, it isn’t without risks.
Advantages
Not only does earning two incomes from the one property produce strong rental yields and cash flows without the expense of buying additional land, investors will pay lower maintenance costs than they would for two separate investment properties.
In addition to the extra space, dual income properties offer flexibility to homeowners who choose to reside in one property whilst utilising the rent received from the other to assist with mortgage repayments. This looks great from a lenders’ perspective.
Disadvantages
Investors need to be aware of the rules and regulations governing the construction of secondary dwellings, which can vary from state to state. Construction of a granny flat often requires council approval. Therefore, it is important that investors ensure the property is fully compliant with the relevant planning laws and is council approved before buying or building a dual income property.
As both properties are recorded on the same title, they must be sold together (with the exception of some duplexes). This has the potential to present significant challenges when it comes time to sell.
Despite the drawbacks, there are some clear financial benefits to investing in a dual income property and it continues to be a popular investment strategy for astute Australian investors. Like all real estate investments, comprehensive research and due diligence is vital and should be undertaken by all serious investors.
At Rosie & Rosie we believe in a simple approach to investing. Our knowledge of the Adelaide market and our experience can help you identify dual occupancy opportunities to invest in with confidence.
For further details, contact Rosie & Rosie at http://rosieandrosie.com.au/contact/
