Not sure on whether to invest in duplex property development? Do you need additional assurance on whether to invest in duplex development or not? Read on to get answers to this and many more pressing questions regarding duplex property development.
When it comes to property investment, a question many investors have is whether or not it’s right for them. The same also applies to investors investing in duplex property development. They want to know whether they’ll get a handsome return for their investment.
One way one can be able to tell if a duplex investment is right for them or not is by focusing on the pros and cons. In particular, one should focus on the advantages and disadvantages of investing in duplex property development. Having said that, below you’ll find details on the pros and cons of investing in duplex property development.
Pros of Investing In Duplex Property Development
- Duplex Designs Are Flexible
- Value Addition
- It’s Not That Expensive
Duplex Designs Are Flexible
Top on the list of pros of this type of property is flexibility. Duplexes, in general, are very flexible. What exactly do I mean by them being flexible? Well, it can be built in two configurations. You can opt to build your’s side by side or house behind house.
In most cases, the thing that determines how you are going to develop your duplex is size, shape and topography of your piece of land. If it allows the type of design you want then go for it. In other words, you can build what you want.
One of the biggest advantages of investing in duplex property development is value addition. The completion of any duplex development increases the value of any property. What you get once development is completely done is the possibility of two rental returns. The best part about this is that you’ll be getting two rental incomes from a single asset.
This, however, is not even the best thing about investing in a duplex. The real gold with investing in this type of property development is equity. With duplexes, you get equity and a high rental income at the same time.
It’s Not That Expensive
With duplexes, you don’t have to worry too much about construction costs. Why? Well, in most cases you are bound to recover all the costs of building one. If you are building a duplex you can opt to live on one side while renting out the other. This is something you can do without necessarily feeling cramped thanks to them being on separate lots.
You can use the money you receive as rent with time to make up for the costs of building it. If you opt to rent out both, the rental income will increase giving you added monthly cash flow. This eventually will cater for the cost of building it all together.
Cons of Investing In Duplex Property Development
- Difficult To Find The Right Location
- Subdivision of Property
Difficult To Find The Right Location
One of the biggest cons associated with investing in this type of property is finding the right location. In general, you are to build a duplex on a certain type of size block. Furthermore, they must have appropriate zoning. This helps in subdividing the units into separate lots helping increase a sense of privacy.
Additionally, if a land holds a high potential value, chances of its premium increasing are very high. This premium can be so high to the point that it makes it not worthy to build a duplex. This is due to the fact that you won’t be able to bring in enough cash flow to cover construction costs.
Subdivision of Property
Another con of investing in duplex property development is the subdivision of property. In most cases, this process isn’t streamlined or straight forward. What this means in consulting professionals like town planners. This as you can tell, is not that cheap. You are likely going to spend thousands of dollars on consulting fees. It’s good to note however that some blocks might have existing approval.
These blocks are normally priced slightly high compared to those that don’t have this approval. Even so, this doesn’t mean that going for blocks without approval will reduce cost. If you opt to go for a block with no approval, you might end spending more. I advise you go for a property with an existing approval. This will help you avoid holding costs that can quickly build up. This cost includes things like council rate, land taxes and loan repayments.
Although they might be a few cons with investing in duplex development property, the pros outweigh the cons. Having Duplex Invest build your duplex is a luxury you can’t pass up.
We have a team of professionals that’ll offer you expert consultation services on a number of duplex development questions. Call 0410 314 179 to speak to one of our staff.