Dreaming of a duplex? Here’s what to consider before you buy

An overview of what to consider before buying a duplex

When it comes to buying a property in Australia, duplexes are an increasingly popular option, providing flexibility and potential financial benefits for both homeowners and investors.

These dual-occupancy dwellings can offer homeowners the chance to live in one unit while renting out the other for additional income - or they can be purchased as investment properties, with both units rented out to tenants.

However, despite the potential advantages of purchasing a duplex, there are several important factors to consider before diving into the world of duplex ownership.

What is a duplex?

Before we explore the benefits of buying a duplex, let’s define what we mean by this type of property.

A duplex is a type of residential building that consists of two separate living units within a single structure.

Each unit typically has its own entrance, kitchen, bathroom, and living space, allowing for independent living arrangements for two different households.

What property buyers need to consider when buying a duplex

1. Location

As with any real estate purchase, location is key when buying a duplex. Consider factors such as proximity to amenities, public transport, schools, and other important facilities.

What’s more, you’ll want to carefully research the rental demand in the area, as well as property appreciation trends.

A well-chosen location can boost the long-term value and potential rental income of your duplex, so be sure to choose wisely.

2. Budget and financing

Before you get going on your search for the perfect duplex, it's crucial to establish a clear budget and secure financing.

Be aware that you’ll need to allow for more than just the purchase price of the property - you’ll also need to take into account additional costs such as stamp duty, legal fees, and ongoing maintenance expenses.

When it comes to financing, be sure to explore your options thoroughly and consider seeking pre-approval for a home loan. This will give you a clearer understanding of your borrowing capacity and help streamline the buying process.

3. Building inspection

Arranging a thorough building inspection of the duplex is an essential step to take before you commit to purchasing a property.

This inspection should cover both units, as well as any shared areas such as driveways or gardens. Be on the lookout for any signs of structural damage, pest infestations, or other issues that may require costly repairs down the line.

Conducting a comprehensive building inspection can potentially save from having to cover unforeseen expenses later, so it’s well worth the investment.

4. Legal considerations

Owning a duplex involves its own set of legal considerations, especially if you plan to rent out one or both units.

You’ll need to be aware of local zoning laws, strata regulations, and any other legal requirements that may apply to duplex properties in your area.

You might also want to consider consulting with a legal professional or conveyancer to make sure you’ve sorted all the necessary paperwork before going ahead with your duplex purchase.

5. Rental income potential

One of the main draw cards of buying a duplex is the potential for generating rental income. Before purchasing a duplex, it’s important to carefully assess the rental market in your chosen area to determine the potential rental yield for each unit.

This will be influenced by a range of factors, including rental demand, vacancy rates, and rental prices for comparable properties in the vicinity.

By doing your research and realistically assessing the factors that could affect your rental income, you’ll be equipped to make an informed decision about your property investment.

6. Maintenance and management

Owning a duplex requires ongoing maintenance and management to ensure both units remain in good condition, as well as attract tenants if this is part of your long-term plan.

Consider factors such as property management fees, maintenance costs, and your ability to oversee repairs and upkeep requirements.

Worried you won’t have the time to manage the property yourself? You may want to hire a professional property manager to ensure your duplex is well-maintained and remains profitable.

7. Long-term investment potential

Finally, you’ll need to consider the long-term investment potential of your duplex.

While rental income can provide immediate returns, it's essential to also think about the property's potential to grow in value. Researching property market trends and economic forecasts in your area can help to improve your knowledge.

Remember, a well-chosen duplex in a high-demand location has the potential to generate significant returns on your investment - so a little research goes a long way!

As you can tell, buying a duplex can end up being a lucrative opportunity for both homeowners and investors - but only when the purchase decision is based on careful consideration of the factors mentioned above.

By being prepared before making the decision to embark on duplex ownership, you can reap the benefits of this type of property purchase.

Keen to learn more about the home-buying process? Check out our other articles and stay in the know about all things home loans.

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This article is intended to provide general information only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Please consider seeking financial advice before making any decision based on this information.