Are you planning to invest and generate income using dual occupancy homes? If you’re living in one, and planning to rent the place out, you can Of course, you need to renovate and get the right permits before you can start having your dual occupancy homes rented.
Nowadays, dual occupancy homes are becoming more popular, especially for families and investors. In terms of being an investment, there are many benefits to dual occupancy home can offer that other forms of rental can’t.
In this article, we’ll discuss more of the things you need to know about renting out dual occupancy homes.
What is a Dual Occupancy Home?
A dual occupancy home is composed of two dwellings or houses on the same property. In some cases, both dwellings are only separated by a single wall. However, others are completely separated but still built into one property.
In terms of transforming it into a rental, you can still live on one dwelling, and rent the other. On the other hand, if you’re moving into another place, you can rent out both houses.
Benefits of Dual Occupancy Homes for Investors
1. Increased Income
Since there are two dwellings in one property, you can collect two sets of rent by investing in one property. But even if you’re planning to live in one of the units, you can still earn money while at home. So, no matter what you decide to two, when you at least rent one house out, you can still generate income.
2. Diversified Investment
If you decide to rent both dwellings out, there’s a lower risk that you lose your income. So, while looking for a replacement for the tenant who moves, you can still get money from the other one. This can help you feel less pressured to look for a new tenant.
3. Reduced Costs
Since you’re taking care of a single property, the cost of the maintenance, property taxes, and other shared costs are reduced. For instance, when it comes to construction costs or renovation, you only need to get a permit for a single property, and the additional construction fees are only counted as one, instead of two.
4. Capital Growth Potential
As you continue renting the dwellings out, over time, the value of the property appreciates. In the meantime, you can benefit from the rental fees from your tenants. And when the time comes you want to sell the property, all your hard work in maintaining the property will be worth it.
5. Flexible Lifestyle
Since the dwellings are close to each other, the tenants can be families and their extended relatives, or even two sets of friends. Since multigenerational living can be a common thing in various places, the tenants won’t encounter any problems.
Tips to Maximise Returns
1. Location, Location, Location
Renting out dual occupancy homes may not work at all times, so you should consider things, such as the location of the property. For instance, it should be close to a school, mall, market, and park. The busier the area is, the higher the possibility of getting tenants all the time.
At the same time, you should also look at the local zoning laws in terms of whether you can turn a residential area into a business.
2. Optimise the Property Layout
Each dwelling should have enough space in and outdoors. So, when renovating or building the houses, you should optimise the property layout. Of course, there are shared spaces, like the backyard or the parking space, so make sure both can have enough spaces. In doing so, you can attract more long-term tenants and can increase your rent fee as needed.
3. Set Competitive Rental Rates
Before you start renting the dwelling, you should research the common rental fees around the area. Aside from that, you should also look into the current condition of the dwellings, size, and other features. Additionally, make sure you’re not overpricing or underpricing so that your income won’t be affected in the long run.
4. Consider Property Management
If this is your first time owning a rental space, it’s recommended to hire a property manager to take care of the maintenance, and properly manage both dwellings. Although you need to pay for the expertise of the property manager, which is an additional cost, you don’t need to worry about the timing of the inspections and repairs.
5. Leverage Tax Benefits
Another professional you should consult with is a tax agent or an accountant to handle your taxes. Although owning a dual occupancy home rental can have various benefits, it can be a bit complicated to understand for non-experts.
Common Challenges to Lookout for in Dual Occupancy Homes Rental
Although it seems like owning a dual occupancy home rental has a lot of benefits, it also comes with challenges, including the need for high upfront costs, getting permits and compliance with local laws, and managing the tenants.
Final Thoughts
Owning a dual occupancy home rental can help you get a long-term income. You should also take a closer look at the challenges you may encounter along the way.
We hope this article helps you get started with knowing things about renting out a dual occupancy home. If you want to share your thoughts about this, don’t hesitate to comment below!
