The pros and cons of dual key properties
A dual key property can make an affordable first home as well as a great investment property for savvy investors. So, are dual key properties worth purchasing and what are the benefits and negatives of doing so? We explore this in more detail.
What is a Dual-Key Property? Firstly, a dual key property is basically one property, but also has an additional dwelling inside, usually with its own door lock or private access. The main property will include your usual living areas, bathroom, kitchen, bedrooms and an outdoors space, whilst the additional dwelling will typically house a smaller home with one or two bedrooms, a bathroom, and kitchen. It may or may not have its own garage. Sometimes the smaller property might just be a studio.
With an ageing population, dual key homes are gradually gaining in popularity, even though they are relatively new property additions to Australia’s property market. So, why should you buy one?
The pros of a dual key property
1. Only one strata fee to pay Firstly, as there is only one strata fee to pay, you are essentially getting two properties for the price of one, making the property purchase much more affordable.
2. Two income producing properties on one title As you can purchase two properties under one title, there is the option to rent out both properties, providing property investors with a greater rental return.
3. Lower maintenance costs Dual key homes tend to have lower maintenance costs and residents may only face one set of council fees and water rates due to being on one single lot. The smaller property might not have any outdoor areas, so you don’t need to worry about mowing the lawn. If you buy a brand new dual key property then your appliances are less likely to require repairs in the next few years.
4. More privacy A dual key property can also offer you with more privacy. If your children are growing up, but want their own space, they can live in one section of the home and you can live in the other.
5. Elderly residents Families who have elderly relatives can also benefit from a dual key property if they need to look after their relatives, whilst continue to live close by. A dual key home provides the perfect solution for this, whilst providing each resident with their own space to go about their day to day routine.
6. Perfect for students Dual key homes also provide a low-cost lifestyle to suit both students and first-time renters. A group of friends can live in the main house, whilst couples could rent out the smaller property.
As well as a variety of pros to buying a dual key property, there are also some cons you also need to be aware of. These include the following.
The cons of a dual key property
1. A dual key property may not be as in high demand As dual key properties are relatively new in the Australian marketplace, it’s hard to know how much demand these property types will attract. However, if you buy a dual key home in an area that is close to transport, schools, retail and dining then you are more likely to attract tenants. Just make sure you do your thorough research beforehand to know the local demographics.
2. Tougher lending from banks Banks and lenders may have reservations in approving mortgages for dual key properties, especially as this property type is fairly new to the Australian marketplace. You should therefore speak to a reputable broker beforehand and find out what restrictions you could potentially face.
3. Cannot sell separately When it comes to selling the property, the two dwellings must be sold together and not separately which could cause issues. However, to get around this, a dual key home can be re-converted into a single property to create a larger property. This can help push your overall property price up.
Although dual key properties have their pros and cons, they can make a great first home or investment property, especially as the Australian population continues to grow and the demand for property increases. You need to ensure that you do your thorough research beforehand to make sure you buy in a good location and have the right target demographic that you can tap into to make renting out your property far easier.
Get in Touch To find out more about dual key properties and what dual key homes we currently have available for sale across Australia, get in touch with the iBuyNew team today by calling us on 1300 123 463.
Published on 20th of September 2017 by Marty Stanowich