Dual occ

(Edit - split from this thread: Niches in the property industry)

I'm now focusing on dual occupancy - real dual occupancy that is , with stand alone 4 bedroom homes and stand alone/detached granny flats as the secondary dwellings... not the "all under one roof, separated by a wall " dual occupancy that is starting to multiply in SEQld.

 

a dual occupancy is a dual occupancy. The "real" is only defined in your dictionary. I have both attached and detached granny flats in my portfolio, obviously there are pros and cons of each, and it all come down to the numbers, and where you want to invest.
Orange and Bathurst definitely have cows, but it's not the only place that has cash cows

 

That sounds very interesting too, I like the idea of the cash flow + only, you would have to really be in line with every market in Australia to do it effectively. And your valuations sure would have to be spot on accurate to be sure the investment is cash flow positive.

And I know what you mean by the dual occupancies, people putting up a wall somewhere in the house to make a seperate section, putting a fence half way down the yard, slap a unit title on it and call it a "dual occupancy".

 

Actually...not so much. Cash flow/ numbers wise, yes. Flexibility wise, no. Lending wise, often a no. Valuation wise, quite often a no. Right now for example, many banks and valuers are "conveniently" seeing dual occ under one roof as dual key, and the subsequent lender appetite, mortgage insurer appetite, LVR etc are all being compromised by this change in view. This is one of the greater weaknesses of the "under one roof" version of dual occ. It leaves the deal open to the discretion of the credit team and the bank valuer. So the numbers may be great, but its an inferior version of dual occ because of the associated discretionary risks. RE valuations; 2 sets of head works required, extra wet areas, kitchens etc- pushing up the price per M2 of construction. Take a 4+1 for example. When compared to the same sized "vanilla" 5 bed home , construction costs are higher. They have to be, because of the extras involved. Problem is- valuers rarely take that into account, because the mortgage purpose valuation will often see the dwelling as a 5 bedroom home with some extras, not 2 independent dwellings. So it's very common to experience valuation shortfalls on this type of deal.

This is not my first rodeo - my "dictionary" has evolved over many years of seeing literally hundreds and hundreds of these deals.

I dont recall anywhere in my post that I mentioned either Orange or Bathurst . But yes, they do work very well there - and in NSW in general because of the SEPP and its granny flat friendly applications. Thanks for noticing. Oh just quietly, on the subject of Orange and Bathurst , which I will happily mention - first ones are reaching completion now and da da! Bank vals are stacking up at 50K above the contract price on completion.... like I said - not my first rodeo Thats my niche. Deals that work. Not some of the time. All the time. Without exception.

Cash Flow.

Valuations.

Growth.

 

As a valuer I know what you're on about. Here in the ACT there are not too many around that are the same title. There are loads of dual occupancies or houses with a granny flat which are pretty straight forward (besides being a pain to find sales for). Most of the time if there are two separate dwellings under 1 roof they will be unit titled. Otherwise almost all seem to be two completely separate dwellings which makes it easier and more accurate. I was assigned to do a duplex on a single title once but gave it to one of the more experienced valuers. But overall yes, if there are two separate dwellings under the same roof on a single title not an easy valuation with a bit of room for error.

 

I have both attached and detached dual occ. Yes sure they were both difficult to get the bank valuation to match with the market comparable, but I didn't see such inferior/superior between them.

Yes a vanilla 5 bed construction will be cheaper than 3B+2B dual occ under one roof. That's because there is extra kitchen + bathroom + firerated/sound proof wall + seperate meters.. But, you should really compare the construction cost a 3B+2B(attached) and 3B+2B(detached)... and often latter the construction cost is higher.

If I had a land that is 600-800m2 and it's new build, yes likely influence the decision to go detached. However for 350-450m2 and a new build, I would prefer a "duplex" like attached Main+GF with both street facing, rather than a battleaxe type

 

Am I talking to the same Euro?? I remembered you even had Orange and Bathurst in your signature one time.

 

Definitely easier to find comps for that type of property, also reflects that they are easier to no e hence lower lender risk.

 

Specific to those posts, yes. The particular post you referenced didn't mention either place

 

I personally would NOT go near 350-400M2 for a new build dual occ.... not because the dwelling may be the problem, thats just not enough land in my view. But each to their own It could work under the right circumstances

 

I believe you would NOT go near 350-400M2 for a new build dual occ.....For me personally I would go closer to a major city, and go up a floor (similar to a townhouse style) dual occ if I have to....each to their own and niches I guess..

But yes I agree, dual occ is the way to go

btw.. are you running out of cash cow images ?

 

El Cash Cow is getting lots of attention these days... I suspect there will be a noticeable increase in investors looking for these sorts of solutions to their cash flow woes and P&I woes , as time passes.

 

Single storey dual occ on 360sqm can work with the right zoning.

Ours includes 2 x single garages and reasonable size back yards. We also managed to squeeze in a secure storage / parking spot behind gates for a third income stream (or 5th income stream in NRAS counted separately).

Here in Perth I would look for a property where I could fit a dual key house (many builders now offer these) plus a granny flat (so 3 x rentals on the property). Preferably a corner block so easy access to the granny flat from the side.

 

Would wanna check with your local council as GF's are normally limited to one dwelling and one GF, as three self-sustained living areas on the one title can be frowned upon.

 

Multiple occupancy is the way to go - I still have 5 of them left. But the same principles of property investing apply.

Don't buy new, buy something you can add value to, buy under market value, get the best piece of land you can afford etc. Much better to creat your own multi occupancy rather than pay extra for the idea.

A great concept - but beware of sprinklers.

 

I was always told they were good for your lawn, what kind of nefarious deeds are they upto?