Join Australia's most dynamic and respected property investment community

Lower and upper Duplex

Discussion in 'Property Management' started by Excalibur1, 1st Jul, 2015.

  1. Excalibur1

    Excalibur1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    183
    Location:
    Sydney
    Hi All,

    I live in Sydney and have recently noticed a lot of houses either being sold or leased as upper and lower duplex. I checked on few of them and checked with council and found that out of 4 houses i checked only 1 was council approved for that arrangement.

    I spoke to few real estate agents about how that can work and the fact that most of those houses didn't have council approvals but they said it will still rent out. The only thing is to find the right tenants. One agent even pointed out that he has one property rented out like that for the last 4 years and never had any issues. The yields on those properties are pretty attractive.

    Has anyone on the forum had experience with this type of duplex and what they thought positives and negatives were? How did you divide utilities? I understand that can be considered like attached Granny Flat but the floor space on all of them was more than allowed 60sqm.
     
  2. Scott No Mates

    Scott No Mates Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    5,558
    Location:
    Sydney or NSW or Australia
    Fire separation? BCA compliance?
     
  3. Hive_Dan

    Hive_Dan Member

    Joined:
    1st Jul, 2015
    Posts:
    8
    Location:
    Brisbane
    Hi Excalibur1,

    I'm based in Brissy so take this with a pinch of salt. I manage student accommodation up here so see this very often. I think it's a great model and i don't understand why councils don't make it easier. Though i'm blatantly biased.

    I won't talk about specific requirements as it will be completely different down there but here are some things to consider.

    1) Fire Compliance: This is your main concern as it has the biggest consequences if it's wrong. Look for someone who does rooming accommodation as they'll understand higher compliance levels then you're average residential smoke alarm company. If in doubt do more, not less.
    2) Building Code compliance: make sure it's legal height downstairs.
    3) Council restrictions: E.G Are there restrictions on the number of unrelated people allowed at a residence? You'll really only have a problem here if there are complaints to council. If you have a good manager and the property is well maintained, the yard nice and the tenants not partying it's unlikely you'll never have a problem.
    4) Insurance: Make sure you tell them this as it might be a slightly higher premium, no use having the wrong insurance.
    5) Assuming your fire compliance is good, ask yourself if you're comfortable with this as a worst case scenario...If there is a complaint or council says you need to drop to 1 tenancy do the $ still work?

    Let me know if that was of any help!
     
    Excalibur1 likes this.
  4. Excalibur1

    Excalibur1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    183
    Location:
    Sydney
    Thanks both for pointing these things out.

    I agree with you Hive_Dan councils should allow it as long as you meet all the requirements. Where I plan to build the council down not allow side by side duplex. However a lot of people are doing upper and lower duplex in the area. Where they either have 2 entries one for downstairs and one for upstairs or they have one entry which leads into hallway and from there there are 2 doors. One for downstairs an the other for upstairs. I know council does not allow this wither but, if you design it in such a way and comply with requirements then council cant do anything. The only thing they say is that only one kitchen is allowed per house. You are allowed to have kitchenette. This is where I see the only rule break, where the conversion is made into kitchen after inspections pass (new build).

    Out of the 4 houses I inspected one has all the proper requirements. The other 2 don't have council approval but it is Fire Compliant they are also legal height. The only difference that downstairs kitchenette was converted into kitchen. That's the only extra thing that was done.
    As for the insurance i'm not sure if they have it or not or if insurance would even cover this type of arrangement (something to look into). Can it still be insured if you convert kitchenette into full kitchen?

    I'm thinking of designing upper and lower duplex house for my next build, this is why I'm interested in this.

    Later down the track I would like to do student accommodation too...but on other projects

    Cheers
     
  5. Hive_Dan

    Hive_Dan Member

    Joined:
    1st Jul, 2015
    Posts:
    8
    Location:
    Brisbane
    Insurance should cover it, just use a broke, disclose all material facts and you can't go too wrong. MGA Insurance brokers are who I recommend in Brisbane. I think they may be Aus wide, but couldn't vouch for their other offices.
     
    Excalibur1 likes this.
  6. Excalibur1

    Excalibur1 Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    183
    Location:
    Sydney
    Thanks for that. I will give them a call today and see what they say bout insuring upper and lower duplex type of properties.