Affinity Property has helped hundreds of clients buy, sell & lease duplex properties over the past 15 years. Duplexes are still very popular with rental property investors and they are increasingly sought after by large, extended families. Below are our 5 Expert Tips to help you improve your investment return when you buy, sell or lease a duplex property.
5 Expert Tips to Increase Property Investment Return on Duplexes
Tip 1. Dual Title vs Single Title - which is better?
When you buy a duplex in Queensland, it will either be on single title or have two separate titles for each lot. There are pros and cons with each structure. Single title often reduces some costs such as rates, water and insurance (this cost difference can be as much as 15% – 20%). Dual title allows you to sell one lot and retain the other. A body corporate is also required with 2 lots, however this can be formed by the owner/s of the 2 lots under the Two-lot schemes module.
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Tip 2. Structure Tenancy Agreements for the best return
Most duplexes have two separate tenancies in each dwelling. It is good practice to set up your tenancies so you have a decent gap between the end dates for each tenancy agreement. This way you will always have at least one of your properties occupied when the other tenant is vacating. It is also important that your neighbouring tenants are compatible so that you minimise tenant turnover and keep your letting costs down. Other practical steps you can take to improve your rental return include …
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Tip 3. Keep an eye on conveyancing and transfer costs
When you buy and sell a duplex it is important to consider whether there is single or dual title and the impact this has on costs. Dual title will incur two lots of stamp duty when you purchase. Many solicitors will also charge two lots of legal fees. Some real estate agents also charge two lots of sales & marketing fees. It is important to shop around and agree up front in writing any costs you will incur when you buy or sell.
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Tip 4. How to attract the largest number of buyers when you sell
There has been a steady increase in duplex construction over the past 15 years. We find there are distinctly different buyers for duplexes. Investors will understandably target dual rental income properties and want to buy for the cheapest possible house prices. Owner occupiers (generally extended families) are buying for personal reasons and consequently there is more emotion involved in the buying decision/negotiation process.
We often see duplexes that are poorly marketed and sit on the market for a long time, due to the lack of understanding about buyers. If you want to achieve a great price and sell quickly, you need to make your investment property stand out when it is being marketed.
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Tip 5. What type of tenants prefer duplex properties?
Duplexes attract a wide range and cross-section of tenants. They are popular with older single tenants, due to single level construction and the added safety of a close by neighbour. They are also very popular with single parents who have one or two children. The benefit of a second bathroom, fenced back yard and window and door security provides parents with peace of mind about their children’s safety. Having a close by neighbour can also be very beneficial for single parents if they need emergency baby-sitting.
The plus side of duplexes is they are often attractive to anyone who doesn’t have a larger family and they rarely attract noisy households with young adults.
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