5 Reasons Building Two Instead of One Could be The Right Play

5 Reasons Building Two Instead of One Could be The Right Play
Antonio PinalJune 23, 2020

Are you planning a knock-down and rebuild? Or perhaps you’ve acquired an empty lot and you’re planning to build that dream home on it. 

It’s an exciting time - not everybody gets to plan every single detail of their house. You get to plan your fixtures, fittings and finishes. But it might be worth pausing for a while and considering building two dwellings instead of one on a single block. 

Now, there are a few reasons why you should do a dual occupancy project such as this. It is a tactic favoured by Melbourne’s leading townhouse property developers, so it could be the right play for you in terms of generating wealth. 

Let’s take a look at five reasons why you should consider this move. 

1. Flexibility and Choices

If you’re building as an owner-occupier, building two residential dwellings on a large lot gives you more flexibility and choices. For example, you could live in one property and rent the other one out. This allows the rental to enjoy some capital growth until you want to sell it for a nice profit. 

You might even choose to build an investment property. In which case owning a dual occupancy would increase your rental yield, and in most cases significantly. If you have aging parents, you could move them into the second dwelling while you live in the first. You can be close to them to provide care as they need it. 

By developing two properties instead of one you are giving yourself flexibility and choice. 

2. Higher Rental Yields

If you do choose to rent out both or one property, any tenants who come to live there will pay the market rate for the suburb. This means that if you let out a build you’ve completed, you will get a higher return than if you invested in an existing property. This is because you save by building yourself.

3. To Grow Your Wealth

With the right support, everyday landowners can generate wealth by embarking on a dual occupancy development. It is a proven, low-risk way to grow personal wealth. That said, if you do it yourself with no prior experience, it will quickly become a high risk, costly venture that could see you go bust. 

If you’re not prepared to put in some time and effort into learning the ropes it can be a fool’s errand. This is why using a property development project manager is a great idea. If you want to attempt a project like this but are time poor or lack the confidence to go it alone using a project manager is a great option. 

4. To Gain Leverage for Your Lifestyle

You might have a preference to live in a certain location, but you’ve found yourself locked out of it due to the cost of real estate there. By undertaking a dual occupancy development, you can use your land to springboard off. You could generate enough profit to buy outright in your preferred location or have enough for a tidy deposit and a lower mortgage to pay off. Building two instead of one will give you the flexibility and capability to make your next move, to where you would rather be. 

5. Tax Benefits

Owning multiple dwellings gives you some solid tax benefits, including depreciation allowances which can often result in a ripper tax refund. And if you choose to rent out one of the homes you have the potential to be negatively geared.

To Conclude

So, there are five reasons why building two instead of one could be the right play for you. You get flexibility and choice. And, if you rent out one or both properties you will get a higher return on investment. At least compared to buying an existing rental property. 

It is a proven way to grow your wealth, but only if you know what you are doing. If you don’t, consider engaging professional property developers to manage the project for you. You can use the profit from building two to move to the desired suburb, and you get to enjoy the tax benefits that come along with it. 

Good luck and happy developing! 


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