When searching for details on duplex properties in Sydney, consider the challenges of building them compared to the benefits. You might be wondering how to maximise your investment’s return while lowering costs that impact your earnings. Making decisions that align with your financial objectives requires awareness of these issues.

In Sydney, duplexes are becoming a more favoured investment. This is because they provide various options, such as renting both units or living in one and renting out the other. Due to the high demand for rentals in Sydney, the dual-income strategy increases rental revenue potential, making duplexes an even more alluring investment option.

To optimise your profits, you must be aware of all associated expenses. Everything from purchasing land to building supplies and continuing upkeep will impact your business. Prudent budgeting and cost control are the secrets to making your investment profitable in the long run.

Having invested in and developed real estate for many years, I have seen firsthand how good planning can result in significant financial gains.

Let’s examine the expenses of constructing a duplex in Sydney and consider strategies for making the most of your investment.

Understanding the duplex building process

A duplex is a house split into two separate homes that share a wall or floor. You can make it an excellent investment because you can live in one part and rent out the other. Some necessary steps when building a duplex home are:

1. Planning

First, check if you’re allowed to build a duplex in your area. Then, ensure you have enough land and determine how much it will cost.

2. Design

Work with architects and engineers or a builder who has duplex designs already prepared, to create an aesthetically pleasing, practical layout. Make sure it follows all the local building rules.

3. Construction

Hire certified, good builders like Provincial Homes who know what they’re doing. Ensure everything is built safely and according to the rules.

4. Paperwork and money

Get all the necessary permits. Find ways to fund the duplex home, such as getting a loan. Comply with regulations on insurance and property details.

How much does it cost to build a duplex in Sydney?

Building a duplex in Sydney is a costly undertaking. You’re looking at about $700,000 to $1.5 million, and that’s not even counting the land or tearing down any old buildings. Here’s a breakdown of the costs:

Land purchase

You’ll need a decent-sized piece of land, about 400-500 square metres. Depending on where you want to build, that could set you back anywhere from $600,000 to $1.5 million in Sydney.

Construction costs

Expect to pay between $400,000 and $700,000 for each unit. The exact cost depends on its size, how fancy you want it, and what materials you use. About a quarter to a third of this goes to paying the workers.

Professional fees

Architects usually charge 5% to 12% of the building cost, and builders take another 10% to 20%. You’ll also need to pay a surveyor to assist you with the actual subdivision of the land, which is usually a few thousand dollars. 

Legal and financial costs

There are legal fees, which are usually a couple thousand dollars. You’ll also have to pay stamp duty on the land. If you’re borrowing money, the bank will charge you a fee, too, usually about 0.5% to 1% of what you borrow.

What are the requirements for a duplex in Sydney?

Building a duplex in Sydney requires following specific rules and regulations. These ensure the duplex fits local planning guidelines, meets safety standards, and suits the neighbourhood’s character. A general guide to follow is:

• Minimum lot size: 400 square metres or the minimum size specified by the local council.

• Minimum block width: Around 15 metres (if the dwellings are side by side).

• Maximum building height: 8.5 – 9 metres.

• Minimum width of each dwelling: 5.5 metres.

• Minimum side setback: 0.9 metres (larger setbacks required for blocks wider than 24 metres).

Additionally, there are more complex requirements to consider, such as:

• Each dwelling must face a public road.

• At least one off-street parking spot per dwelling.

• Designs must comply with the Low Rise Housing Diversity Design Guide.

• Duplexes are generally allowed in R1, R2, R3, and RU5 zones.

• The development must meet the standards for complying with development to be approved under this process.

Cost-saving strategies

In Sydney, building a duplex can be expensive, but there are methods to save expenses without sacrificing quality. Here’s how:

1. Design efficiency

Collaborate with your architect/builder to design a brilliant plan. Count every square metre. Consider areas available for several uses and rooms with ample natural light. This can save construction costs and give the duplex a larger feel.

2. Material selection

Choose long-lasting materials, even if they require a little higher initial investment. When choosing fixtures and finishes, strike a solid balance between cost, functionality, and appearance. To get better prices, try buying in bulk and haggling with vendors.

3. Construction methods

Explore new methods of construction, such as assembling prefabricated components. This can result in labour costs and time savings. Additionally, consider eschewing conventional materials in favour of lightweight steel. Planning beforehand can help prevent delays and resource waste.

4. Government incentives and grants

See whether any government initiatives are available to assist you in making financial savings. For instance, the NSW government offers funds to accelerate housing construction. There may be further benefits your local municipality provides for constructing a duplex. You may also be eligible for a financial reimbursement if you incorporate energy-efficient measures.

Maximising rental income

Once you build your duplex dream and plan to maximise the return on your investment, you must take a calculated approach to rental income.

Here’s how to get the most rent money while keeping your costs down:

1. Market analysis

Research other rentals in the area. What are they charging? What do they offer? This will help you set the right price for your units. Remember, location, size, and what’s included all matter when deciding how much to charge.

2. Duplex design for rental appeal

Think about what renters want. They usually like places with good layouts, plenty of storage, and privacy. Air conditioning, new appliances, and outdoor spaces can make your duplex more attractive. Use materials that look good but only need a little upkeep.

3. Property management considerations

You can manage the duplex yourself or hire someone to do it. Hiring a company will cost you, but it might save you time and headaches. Either way, be sure to check out potential tenants carefully. Good tenants can save you a lot of trouble in the long run.

4. Tax implications

Renting out property affects your taxes. You’ll need to report the income, but you can also claim some expenses. Mortgage interest, property taxes, insurance, and repairs can often be deducted. It’s a good idea to talk to a tax expert about this. They can help you save money and ensure you follow all the rules. 

Financial considerations

To ensure that your investment will be profitable in the long run, it is critical to comprehend the financial aspects of owning a duplex. Here are some things to consider:

1. Return on investment (ROI)

Compute your rent income and compare it with the amount you invested in the duplex. This covers the duplex’s construction, land acquisition, and recurring expenses. 

2. Financing options

There are many options for financing your duplex. If you own a home, you can use the equity as collateral for a loan or apply for loans designed expressly for investment properties. You may also split the expenses and risks with other investors.

3. Risk management

Since plans don’t always work out as expected, it’s critical to be ready:

• Invest in quality insurance. This should safeguard you if someone is injured on your property, the building and your responsibilities as a landlord.

• Put aside a little extra cash in case you go a long time without tenants. This way, you can still pay your bills, including your mortgage.

• Pay attention to the real estate market. If circumstances change, you may need to modify your investing plans or the amount of rent you charge. 

Frequently asked questions

How long does it take to build a duplex in Sydney?

Construction of a duplex often takes 12 to 18 months, while getting permits and approvals takes about 9-12 months. The building timeline will change depending on the design complexity, site condition, and efficiency of the construction team you hired. 

Do I need council approval to build a duplex?

Yes, building a duplex requires council approval. Duplexes normally need a Development Application (DA), but if they satisfy specific requirements imposed by local governments and zoning laws, they may also be granted a Complying Development Certificate (CDC). 

Should I hire a builder or project manage the construction myself?

Yes, hiring a builder to construct duplex properties is best since they offer expertise, experience, and established connections to make the construction process smoother. 

While managing the house plans might save you money, it can lead to issues with coordination, compliance, and quality control if you’re not experienced in construction management. 

Summing up

At Provincial Homes, we have built many duplex homes all over Sydney since 1990, with over 3,500 satisfied customers. We can advise on building a duplex home and help you understand the duplex rules in your area, including whether you want to knock down and rebuild a duplex.

We offer a range of duplex home plans, including duplex designs for narrow blocks, or we can custom design a duplex property to meet your requirements.

Have any questions about our services? Feel free to contact us directly at 02 9629 5200 or visit us to discover more about building with Provincial Homes; please contact us today or visit one of our display homes.

Learn more about Provincial Homes. Explore our range of home designs, including single-storey, double-storey, duplex, and acreage homes. You can also view our display homes, read customer testimonials, or discover more about our Six Star Commitment and 30-Year Structural Guarantee on our website.