The Duplex or Dual Occupancy

THE INCENTIVE

“The whole is greater than the sum of its parts.” – Aristotle

 

Its terrible to draw a parallel with Aristotle and a duplex but the reality is that one of the great benefits of a duplex or dual occupancy is that you get the benefits of a house without the price tag. We have worked on several duplexes in the last few years. Each has been prompted either by the financial and social benefits of having parents and children living in close proximity or by the prospect of financing the building of one half by the sale of the other half.

 

Either way, the clients have effectively got more for their bucks than if they had put them all into a single dwelling.  So, odd as it may sound, it’s not so unreasonable to be quoting Aristotle!

 

Does the conversation that prefaces building a duplex sound something like this?

 

“Your brother gets a lot of baby sitting…” (Thats code for we don’t get enough)

“Well my parents live just down the street. So yeah of course they do.”

“So if my parents lived next door we could get all the baby sitting we want…”

 

THE OPTIONS

There are various types of dual occupancy dwelling. They may be a semi detached house, townhouse or duplex. The two houses may be attached or detached, they may be on a battle axe block with a single entry from the street or one may have an entry from the main street and the other from a secondary street. For the purposes of this post we are talking about the type of dual occupancy referred to as the duplex.
The duplex consists of two attached dwellings which are either side by side and share a common wall or one dwelling on top of another and share a floor/ceiling. As shown below they may be on a single parcel of land which is strata sub-divided, be on their own torrens title lot or exist simply as two dwellings on a single parcel of land and single lot. If the two dwellings are not attached they are referred to simply as dual occupancies.

Duplex Options

Duplex Options

THE NEW RULES

There is a new player in town and its called the Draft Medium Density Design Guide. Early next year we anticipate this new design code will be implemented which will pave the way for various types of medium density dwellings such as duplexes and terraces to be built without the need to go through council. This will save you time, heartache and money!

As outlined in the draft code there are numerous requirements of any new development just like there are if you venture down the traditional development application pathway. However there are also opportunities for even more favourable outcomes on certain sites when pursuing a complying development pathway.

We recently did a feasibility for a site in Balgowlah where we were asked to look at sub-dividing the site and putting a Duplex on it. Under the existing controls we could subdivide the site (but only through a DA) and then design two attached dwellings like this. Under the new controls we could design two new detached or attached dual occupancy dwellings which are either strata or torrens titled concurrently with the building application. In this particular case the floor space we would achieve through a complying development would exceed that which is set out in council’s LEP.

 

Development types

Development types

The ‘missing middle’ as termed by the NSW Minister of Planning, Rob Stokes is the focus of the new medium density housing guide. It represents the middle ground in housing size and density and will include amongst other options the duplex. This housing typology offers additional choice for those who perhaps cannot afford a house but do not want to live in an apartment either.

 

CASE STUDY

As an example a property such a 5 Llanfoyst St in Randwick currently for sale with an R3 zoning ( medium density dwellings permissable) could potentially be developed under this new code as two torrens titled duplexes . Subject to what dwelling types council permits the site may also be suitable for what will be called Manor Housing.

Under the current and proposed complying development code this property could potentially be sub divided with each torrens title lot achieving an FSR only slightly less than if the application was made through a traditional DA. This lot could be sub divided under both the existing LEP lot size requirements and under the new proposed sub division code lot size requirements

Subject to the other requirements of the code (including setbacks, height, landscaping etc) the purchase price of the existing property and construction costs, under this new code redevelopment of this site as a duplex could represent an exciting opportunity.

If you have a property you are looking at purchasing for this purpose feel free to email us or give us a call to talk it over.

 

ADVANTAGES OF BUILDING A DUPLEX (THROUGH COMPLYING DEVELOPMENT)

The whole is greater than the sum of its parts for these reasons:

● Live in one and rent the other one. Duplexes are homes with cash flow.

● Increased density makes better use of more of the site area

● Use the proceeds of the sale of one to pay off the one you live in.

● Family members sharing the cost of one block of land while benefiting from living next door to each other. Assuming that would be a good thing.

● More affordable entry into the market with a similar outcome in terms of living amenity

● Reduced risk – Easier financing due to a more certain development application outcome.

● Ability to effectively halve your mortgage term by providing you with the ability to double your mortgage re payments.

 

THE FINANCIAL VIABILITY

From a financial perspective the build cost of a duplex may not be substantially greater than for one large house while doubling the density of the land could double its value. Duplex properties can definitely be good investment options for the right client in the right location. This new legislation will be particularly relevant for the middle ring suburbs (that group of suburbs that stretches from the northern beaches through Parramatta, the Canterbury-Bankstown region and down to Botany Bay.

For some additional thoughts on why a duplex may be the right investment for you the following link is an interesting listen.

How To Buy Or Build A Dual Occupancy Property

ARVE Error: Mode: lazyload not available (ARVE Pro not active?), switching to normal mode Dual occupancy can be a great way to achieve positive cash flow. In this interview you’ll learn how to buy or build a dual oocupancy property. Hey Guys, Ryan here from onproperty.com.au, helping you find positive cash flow properties.

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