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Sales Price for Duplex

Discussion in 'General Property Chat' started by Matt E, 4th Dec, 2015.

  1. Matt E

    Matt E Member

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    I'm looking at building a duplex (1x3 bed, 1x2 bed) on a lot in Petrie north of Brisbane, and trying to find evidence of the potential value of the duplex after completion.

    For example, if a 4 bed house costs $400k and generates $400/wk rent (5.2% yield), and a duplex on the same size block would generate $500/wk in combined rent, what is the the duplex worth?

    The few examples that I've been able to find suggest that you can't calculate the duplex's value using the same yield (which would be $500k in the example above), rather that the duplex generate higher yields of at least 0.5% to 1% higher.

    Very new to all of this, any advice would be appreciated - thanks!
     
  2. Sonamic

    Sonamic Well-Known Member

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    What is the land worth and what is the build cost? Are you going to keep it on a Single Title?
     
  3. NicA

    NicA Member

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    I would look at the value of similar townhouses in the area and then x2 - I recently settled on a duplex in Strathpine and that's how the bank valued it.

    Happy to share further details of the deal via PM :)
     
  4. Scott No Mates

    Scott No Mates Well-Known Member

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    Yield calculations aren't used for residential property valuation. Gross yields are even less reliable.

    Use comparable sales evidence.
     
    Leo2413 and York like this.
  5. big max

    big max Well-Known Member

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    Yield should typically be higher for duplex. But overall a duplex structure would also be priced higher than a stand alone house on same land size. Hope that makes sense?
     
  6. teetotal

    teetotal Well-Known Member

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    I was recently quoted $350K each building for a double story duplex construction in Melbourne for the whole process including town planning, council approvals etc.
    I thought it to be not worthwhile even thinking about building a duplex as the return will be quite low due to high cost of building. But just read @Terry_w 's post about not to take no for an answer even though this is not a direct no but similar. So i'll explore more.
     
  7. big max

    big max Well-Known Member

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    That is the problem in general in oz. Cost of building is high for sure. Many places are currently still selling for less than what the cost of the land plus the cost of building the structure would be.
     
  8. Matt E

    Matt E Member

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    Thanks for the replies so far. FYI, the land component is just over $200k and I've been quoted $240k for all-inclusive build for a 3 bed/2 bed. Looks good at $600/wk in combined income. I'm not interested in strata-titling but keeping it as an option down the track.
     
  9. Westminster

    Westminster Tigress at Tiger Developments Business Member

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    As others have said the only way to ascertain value and rental yield is to look at data from comparable properties, talk to PMs and REAs.
    That will help determine what the value is but also they may have good input on what is popular for the area to make it stand above the rest.
     
  10. devank

    devank Look, lets just get on with this, ok? Premium Member

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    If you can't find comparables then may be can we guess by going between a similar townhouse and a house from the same area?