What is a dual key property?
Dual key property is otherwise known as dual occupancy property, or a dual key home. It is a type of dual living property with some similarities to a duplex, but also key differences.
They are a fairly recent addition to the property market, and so you may not have heard the phrase before.
While dual key properties are gaining popularity with Australian investors, they are not for everyone. There are some key features which differentiate them from duplex properties, and which should be carefully considered before choosing between the two.
What does dual key property mean?
A dual key property is a type of property that includes two self-contained residences on the same black of land, separated by a soundproof firewall. Each residence can be rented out to tenants. There are no shared living spaces between the tenants apart from a shared driveway in some cases.
Duplex vs. Dual Key Property
From the outside, they may look much the same. Two adjoining but seperate residences, two garages, two sets of keys, two sets of tenants generating rental income. However a duplex and a dual key property are in fact quite different.
Construction and total costs for dual key properties are less expensive than duplex’s. Return on invetsment is in some cases higher, as the initial investment is lower but rental returns may be similar to a duplex.
There is also the option for different floor plans in each residence. For example, one side may offer 2 bedrooms and fewer square metres, while the other side may offer 3 bedrooms and more living space.
You can find out more about what makes a dual key home different from a duplex here.
What are the drawbacks of a dual key property?
A dual key property cannot be split into two for sale, as it is considered a single property. Not all suburbs allow dual key properties, and finding land with the right permissions can be a challenge.
This has come about from past experiences where a multitude of dual key properties were build in close proximity to each other, resulting in overcrowding, lack of parking, issues with resources etc.
For this reason new developments generally limit the number of dual living properties allowed.
Dual living properties may also be less appealing than completely detached homes in some cases. The rental market demand in that area is something to consider.
If a long term cashflow positive property investment is something that is appealing to you, and you are not needing to separate the residences, a dual key home may be ideal to meet your needs.
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