Do Duplexes Make Money?

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    Imagine being able to buy a home in the neighbourhood of your dreams for a price that is around half of what you would spend for a conventional property. Do you really believe it's impossible? A word on the adaptable duplex. A duplex is one of the most significant income producers that can be found in the real estate world. Purchasing a duplex enables you to achieve high rent yields and excellent value growth for a price that is considerably more cost-effective than what you'd pay for two separate houses in the exact same location. This is because a duplex is comprised of two single-family homes joined together.

    Purchasing a duplex with the intention of turning it into an investment requires you to obtain a building insurance coverage that covers both sides of the structure. In most cases, you won't require a body corporate, but this will depend on the local council as well as the layout of the home.

    What Is A Duplex?

    A duplex is a form of residence that is comprised of two separate apartments located within the same building. It is classified as real estate intended for use by more than one family. In most cases, a single person will hold ownership of a duplex; however, if it is a condo, there may be two different people holding ownership. This indicates that while they jointly own the lot, each of them is the sole owner of their individual unit. Check this list of Melbourne builder services to help you make an informed decision for your treatment.

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    The configuration of the space between the two dwellings can be rather diverse. Some duplexes are built one on top of the other, while others are situated next to one another. Tenants of each apartment will have access to their own entrance, although they will share certain walls as well as the outdoor space.

    Take caution not to confuse duplexes with twin homes, which are two half-size homes that share a wall but have different lots. Duplexes are a separate housing type entirely.


    In addition to enabling investors to maximise the potential of the land without the need for subdividing it, duplexes enable investors to create equity and achieve significant returns on their investments.

    In practise, having a duplex is equivalent to owning two individual residences on the same street. As a result of this, duplexes are typically seen as investments with both strong growth and high yield.

    If you choose to rent out both of your homes, you will have the option to choose between two different streams of income, which will ultimately help you achieve a positive cash flow and a high-interest return over time. When opposed to apartments, duplexes often command a higher monthly rent payment. On the other hand, if you want to live on one of the homes and have the other rented out, you can utilise the additional money to pay off your mortgage faster. If you plan to live on one of the properties and have the other rented out.


    It may be difficult to locate a decent deal in the market for duplexes, despite the fact that they may seem like a fantastic investment.

    To start, the construction of duplexes is not always permitted by the various municipal councils. It is important to remember, whenever you find a duplex that does add value to your portfolio, that not all duplexes are guaranteed to do so in the same way.

    When selecting a site for their duplex, investors are strongly encouraged to use extreme caution. The presence of a large number of duplexes in the neighbourhood is not necessarily a positive indicator because it may cause the value of your property to decrease.

    Instead, select cities that have a continuous population increase and a low proportion of duplexes in comparison to freestanding homes in order to ensure a high demand for housing. In the event that you do not, you run the risk of experiencing the repercussions of an extended vacancy.

    Due to the fact that you effectively own two different properties, your upkeep and other associated costs are likely to be significantly greater.

    Even if you and your tenant agree to split the costs equally, this will only result in a reduction of those costs by half, which is not nearly as significant as reducing those costs by a factor of twelve, as would be the case if you owned a unit in a strata-titled complex that contained 12 units.

    In addition, if you choose to live in one of the houses and rent out the other, living immediately next to your renter could create special challenges, such as a lack of privacy and the potential for late-night calls due to an emergency at the property. In order to avoid arguments, it could be beneficial to establish some ground rules, such as "silent hours."

    Additionally, there are financial and tax repercussions that are unique to dual-income assets like as duplexes and other similar ventures.

    Due to the complexity of investing in duplexes, you may find it necessary to use the services of professionals in order to ensure that you comply with all leasing laws and regulations that are associated with multi-housing investments and, as a result, steer clear of any potential pitfalls.

    Benefits Of Buying A Duplex

    Dual Income & Positive Cash Flow

    When people are thinking about buying a duplex, the mortgage is one of the most significant factors that can cause them to be hesitant about really going through with the transaction. It is essential for you to check that you have sufficient funds available to pay the monthly instalments on your mortgage. You might even want to consider putting more money towards the balance in order to pay it off more quickly.

    Buying a duplex as an investment has the potential to earn rental returns that are higher than 7 percent, which can help offset the cost of the mortgage. You may move into one of the units yourself to cut down on your monthly expenses and rent out the other to someone else. You also have the option of renting out both flats as an investment, which will result in you receiving two incomes from the property and making it positively geared. This will free up part of your income earnings, allowing you to relax without having to worry about money and even take some time off work to spend more time with family and friends.

    Affordable & Ready To Go

    When you buy a duplex, you are getting a home that has already been lived in, as opposed to when you build a house and have to wait for the work to be finished before you can move in. They are typically ready to be rented out as soon as the sale is closed and the property passes all of the appropriate inspections, or they may even be tenanted, providing you with cash flow from the very first day you own the home.

    In addition, if you do not have sufficient resources, it is typically simpler to obtain financing for the acquisition of an existing duplex than it is to construct a duplex from the ground up. On the other hand, you will no longer have the option to generate equity from the duplex.

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    Save On Land Costs

    If you rent out both units in a duplex, you will have twice the amount of money each month compared to a single-family home. Because it is technically one building, you won't have to pay land fees or property taxes on it unless you choose to title it separately. This, in turn, saves you money. As a result of the fact that duplexes occupy significantly less space than two standalone structures would and that they are located on the same parcel of land, purchasing a duplex is significantly more cost-effective than purchasing two individual properties.

    Financing A Duplex

    When you apply for a mortgage and go through the approval process, you will learn how everything works and what is required. If this is something you are experiencing for the first time, it may open your eyes to several things. You will be informed of where the closing charges go, how long the process takes, and the items that seem to constantly spring up at the last minute. As soon as the closing is through, you will immediately need to begin researching the procedure for renting a property. Finding a decent renter is the most important step in becoming a good landlord, regardless of whether you own a duplex, a single-family home, or a commercial building with 30 units.

    You will become familiar with the application process, the steps involved in creating a lease agreement, and what it is like to work with actual tenants. Although you are living on the same property as your tenant, your circumstance is somewhat unique; yet, the majority of the challenges you will face are the same as those faced by other landlords. This will assist you in compiling a list of contractors and establishing connections with anyone else whose services you might require for work on your home. If you find that the procedure is something you take pleasure in and are able to easily manage, you may be ready for a more significant workload and subsequent properties. Each new tenant will present a unique challenge.

    The process of purchasing a duplex is extremely similar to the process of purchasing any other kind of property. The first step is to gather all of the documents that are required for lender approval. Lenders concentrate their attention on a borrower's income, assets, ability to make a down payment, and credit score. In order to be accepted, you need to demonstrate a level of competence in at least three of the four areas. In today's market for mortgages, having a strong credit score but a low salary is not sufficient to secure financing. The sooner you find out what you have been accepted for or what information you are missing to make your application stronger, the sooner you can begin your search.Planning to build a home? MJS Construction Group brings your building project alive!

    From that point on, you can call around to other area realtors, have them show you houses that are within your price range, and then place an offer on one of the homes. Especially if this is your first purchase, your real estate agent will handle the majority of the acquisition and give you some responsibilities to complete. If you have no notion what it is that you are looking for, look on the Internet to see what options are accessible in your region. When you go into the process with more knowledge, you will be in a better position to make sound choices about the locations of and properties you are interested in purchasing. Are you thinking about giving your home a makeover?

    A Few Things to Know Before Buying a Duplex

    Are duplexes a smart investment? Yes. Does this imply that there are no potential downsides or risks associated with investing in a property of this type? Of course not. Because of this, you should be aware of them before you even begin to think about how to buy a duplex. When you buy in duplexes, you run the risk of encountering two significant problems:

    Duplexes Can Be Hard to Find

    It's not always an easy task, but you should try to get a duplex. In various regions of the country, single-family homes and bigger multi-family dwellings are more frequent than these types of investment assets. However, if you search for investment properties using the appropriate tools, such as Mashvisor, you should be able to identify profitable ones in a short amount of time and with little effort.

    When you want to house hack, it makes finding a duplex a little bit more difficult. It is possible that you will not be able to implement this technique if you are unable to relocate to a city in which the prevalence of duplexes is higher. If this is the case, you might want to consider putting money down for a down payment and investing in a duplex in another state so that you can take advantage of the numerous other opportunities presented by this type of rental property.

    You May End Up Living Next to Nightmare Tenants

    Dealing with problematic renters is a common challenge faced by landlords, which is one of the fundamental disadvantages of investing in real estate and being a landlord. However, in most cases, they will not also be your neighbours, and you will not have a shared wall with them. It's possible that if you buy a duplex and live in one of the units, you'll have to deal with renters who are noisy and troublesome. Or, you can end up with the kind of tenant who believes it is appropriate to knock on your door at three in the morning to inform you that the faucet is dripping, which is information that could have waited until the morning to be shared with you.

    You might also end up with the best tenants possible who are well-behaved because they are aware that the landlord lives right next door. It all boils down to how well you are able to vet prospective renters for a rental property. Be sure to investigate the individual's employment history and credit score, as well as do background checks, chat to past landlords and employers, and run checks on their credit history. To assist you in constructing the home of your dreams, MJS Construction Group offers the widest variety of dual occupancy builder services available.

    What Are Your Financing Options? 

    When you buy a duplex, there are three ways you can finance your investment:

    • Conventional Mortgage — If you are an investor in real estate, you have the option of purchasing your duplex using a conventional mortgage. The initial payment will range from five to twenty percent of the total, and the remaining balance will be paid off over a certain period of time. There is room for negotiation between you and your lender on the interest rate. The higher your credit score is, the better interest rate and terms you'll be able to negotiate for yourself.
    • Owner-Occupied Loan – Is it possible to get financing for the purchase of a duplex using an owner-occupied loan? Yes! In order to be eligible for this kind of financing, you are need to actually reside on one of the two sides of the duplex. Someone who is looking for a place to stay would find it to be an excellent option, and you would be able to use the tenant's rent payment towards the principal balance of your mortgage.
    • Financed by the Owner – It is more challenging, but not impossible, to use owner financing to purchase a duplex for the purpose of turning it into an investment property. Instead of going to a typical bank, you will deal directly with the owner of the duplex who will function as your lender. You make payments to the owner, who then uses those funds to gradually build up equity in the property.Which financing option is best for buying a duplex as an investment property? It depends on your situation. If you have good credit and don’t want to live in the duplex, a traditional mortgage may be the most effective route. If you want to stay in the duplex, the owner-occupied loan can offer you significant savings. Finally, if you don’t want to go through a traditional lender, you can choose owner-financing. If you’re wondering how to buy a duplex with no money down, this is an option if you have equity built up in another property, such as your family home. This article will help you make a decision about home building constructionHere at MJS Construction Group, we’re committed 

    When you first started reading this article, you might have been wondering, "What exactly is a duplex?" You should hopefully have a sufficient understanding of what a duplex is by this point, as well as the reasons why they are generally an ideal choice for new investors. Investing in duplexes does come with a few potential risks, but those risks are considerably outweighed by the numerous rewards. In a nutshell, you will be able to reside in one of the properties while also earning rental money from the other unit that you choose to rent out. If you execute the deal carefully, you may even be able to have the income from your rental property cover your mortgage payments, other obligations, and yet leave you with a monthly profit. This would be a win-win situation. You can discover success in business if you pay attention to detail in your research and careful consideration of business dealings.

    Frequently Asked Questions About Duplex

    Duplex home plans are designed with the outward appearance of a single-family dwelling yet feature two-distinct entries. These designs generally offer two units side-by-side that are separated by a firewall or two units stacked one on top of the other and separated by the floor.

    Duplex apartments are typically built in apartment buildings, whereas villas are built on the ground level. Additionally, a villa may or may not have two floors and depends entirely on the choice of the villa owner.

    If you're thinking of building a duplex in Australia, the average amount is anywhere between $550K to $1.3 Million, not including the costs of the land.

    In most cases, Australian duplexes consist of one overall structure divided into two identical halves by a central wall. Duplexes can be covered by one land title or can exist as separate titles. The two homes can be sold together or individually, depending on the arrangement.
    So it is more efficient to build the duplex. You have two units coming up side by side at the very same time and it's more cost effective. And then for the buyer, you do get more square footage, you get more land value. So it's a win win situation.Apr
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