A Dual Occupancy (DualOcc) project is a good development strategy for both first time investors and the more experienced who want to boost their property portfolios.  It’s also an excellent way to liquidate the hidden asset in your backyard. You can do the subdivision and sell the new home to pay down your mortgage or use the money to invest elsewhere.

Buying land (or using your existing block) and building two dwellings and subdividing means you are basically halving the land cost for each dwelling, which is where the value lies.

What is Dual Occupancy?


DualOcc refers to more than one dwelling on a single block of land.  The dwellings can be either attached or detached – the latter is sometimes referred to as a duplex, or a ‘semi-detached’ if you’re from a British background. 
 
DualOcc developments can provide an excellent income stream for empty nesters who are looking to downsize their own home and maximise the potential of their block of land.  These developments also make an excellent investment choice as there is better opportunity for positive cash flow through increased rental yield and rental income.  A DualOcc investment can also reduce your risk (if one tenant falls out, you have another income to help service the loan) and increase serviceability with banks, as there is usually a much larger income stream.   

How does Dual Occupancy work?


First up you’ll need to find a block of land large enough to accommodate more than one dwelling (or have a feasibility study completed on your existing land), in an area that allows DualOcc developments.  State and local council regulations differ from area to area, as do the builders of DualOcc homes.  For instance, Metricon’s DualOcc designs are currently only available in Metro Victoria, New South Wales and South Australia.   Other considerations are planning overlays, existing vegetation, slope of the land or title restrictions such as single dwelling covenants; these can make the development of some land not possible.

Once you have found the land, you must decide on a suitable DualOcc design.  Depending on your location, you may choose to build side-by-side dwellings (duplex) style, or it may be more practical and provide better return on investment to build multiple dwellings, one after the other, down the length of the land.

Typically there are two contracts to purchase a house and land package - one for the land and the second with the builder for the dual dwelling.  This is good news as it means that you only have to pay stamp duty on the land contract, which saves you plenty of money.

 

How big a block size is required for Dual Occupancy?


The rule-of-thumb laid out by town planners, for proposed multi-dwelling residential homes in a General Residential Zone, is ‘300 m2 per dwelling’.  Therefore, generally speaking, the minimum area of a block of land to be considered for subdivision would be 600 m2.  However depending upon the site and factors such as easements, driveway requirements, significant trees and restrictive covenants, subdivision may be done on smaller blocks or alternatively, require more than 600 m2.
 
DualOcc developments offer an exciting opportunity for investors. Contact Metricon today for a site appraisal to discover how you could realise the potential in your block of land.