Developing a “dual occupancy” has a number of substantial benefits over developing a single dwelling on one lot:
- When a developer chooses to construct two dwelling son the one lot (i.e. a dual occupancy), they have the option of leaving two dwellings on one title, or subdividing and creating two titles. If the developer decides to subdivide the land and create two new lots, typically they have created a substantial equity uplift. By creating a new lot, our clients are able to, in essence, create two new houses and sell them individually. This can result in an equity gain of typically $80,000 to $200,000.
- Should the developer to subdivide their newly created dual occupancy and keep them, they will receive the benefit of two (2) rental incomes – not one. This reduces the risk of vacancy.
- By subdividing, the developer has created two (2) titles and thus has the flexibility / option of keeping both, selling one / keeping one, or selling both. Depending on the developers motivations, this flexibility is something unique to multiple dwelling construction;
- When two dwelling shave been created, the owner has the added benefit of double Tax Depreciation benefits. This provides a significant benefit to their property investment position.
- By constructing two properties, the developer has the option of living in one dwelling and selling or renting the other – thus taking the benefit of an immediate equity gain or ongoing rental income.
Overall, dual occupancy development provides significant benefits to the developer / investor through achieving the highest and best use of their chosen location, resulting in equity gains, increased rental, and greater flexibility.