Investors ask: dual-dwelling investments
What do you think of a dual-dwelling house or apartment that is not allowed to be sold under two different strata titles in the future? Will it affect my selling market and will it diminish my capital growth?
There are several things to consider here, the primary being your exit plan on this property. Often, you are limiting your buyer market when it comes time to sell down your portfolio, if that is your strategy, as this will most likely appeal to investors only, and may also be limited by the fact that there may be lenders that will reduce the loan-to-value ratio (LVR) because it is a dual income property.
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There can be further complications if the secondary dwelling is not council approved.
In these situations, you must always look at the worst case scenario. If you are still happy to proceed, it may make sense to add this property in your portfolio, so long as you are not paying an absolute premium for it to begin with just because it has two income streams attached to it.
Capital growth is more a product of the fundamentals of the area – rather than directly related to the property-type – and what surety there is of upward pressure in terms of growth because of this.
Generally, in an investor driven area, the dual income properties do perform well.
Victor Kumar, director, Right Property Group
