With an ageing population and an increased demand for property, dual key homes are gaining greater popularity amongst Australian property investors.
These relatively new additions to Australia’s property market provide flexible and potentially lucrative options for Perth property owners. As they effectively act as a single-titled property that contains two separate living spaces, dual key homes can maximise rental returns or provide the perfect solution for families looking to house elderly relatives. Here’s everything you need to know about this type of property investment.
Advantages of dual key homes
Double the tenants, double the income – As opposed to duplex housing, which often requires separate strata titles, dual key homes allow for two income producing properties to reside on the same title. Each “ection” of the dwelling can then be rented out to separate tenants, generating higher rental returns.
Flexibility – Whilst dual key homes can increase rental yields, they can also be used by property owners to help pay off that dreaded mortgage. It’s not uncommon for homeowners to reside in one side of a dual key home and use the rent from the second half to subsidise home ownership costs.
Lower maintenance costs – Since dual key homes reside on a single lot, property investors will only face one set of council fees and water rates with this type of investment. So, whilst owners benefit from greater rental income, they will also pay lower maintenance costs than they would for two separate investment properties.
Ideal for elders – With Perth’s increasing population, dual key homes could provide the ideal solution for families hoping to house elderly relatives nearby whilst maintaining separate lifestyles. Dual key homes also hold potential appeal for students or first-time renters looking to reside in a low cost, low maintenance property. To ensure you get competitive rental returns on your dual key property, you should consult your local property management team.
Disadvantages of dual key homes
Unpredictability – Whilst dual key homes could provide the perfect housing solution to the above audiences, they are also relatively new to the Australian property market. It is therefore difficult to predict their appeal to both renters and future property investors. Before investing in this type of property, you will need to consider your target market and the potential for capital growth. It may also be worth talking to your local property managers who will have an in-depth knowledge of the Perth property market.
Difficult securing a loan – Due to the relative unpredictability of this type of property investment, certain banks or home loan lenders may have reservations when it comes to approving mortgages for dual key properties.
You cant sell separately – Although having two separate living spaces on one title can generate lucrative rental returns, these two dwellings cannot be sold separately when it comes time to sell. This could limit the appeal of dual key homes and impact their market value. However, dual key homes can easily be re-converted into a single property to boost their selling potential.
Managing your investment property
Whether you’re a first-time property investor, expanding your portfolio, or looking to manage your existing properties, the property management team at Rentwest Solutions will help oversee the management of your Perth rentals. As well as taking care of day-to-day duties such as rental collection and maintenance issues, our team of specialist property managers can help you form an investment strategy for your Perth rental properties.
For property management advice and solutions, get in touch with the team via email at [email protected] or call 08 9314 9888.