HI all,
I have an IP in Auburn- It's on a corner block, about 630m2 land.
Currently, there is a 3 bedroom house and a 50m2 3 bedroom granny flat (seperated with a fence) both earning a decent rental income. (5.5% yield)
Within the next 12-24 months I want to rennovate the main house and demolish the granny flat and either subdivide or build a dual occupancy as the site is big enough to fit 2 3-4 bedroom houses. I want to hold on to both houses as the rental return in Auburn is quite good.
What I need help on is this- Am I better off leaving it under one title and going dual occupancy, or, would I be better off subdividing and holding two titles? Are there any benefits in either?
Hardly call 5.5% return decent but i guess beggars can't be choosers.
Will you pay double rates if you subdivide. I don't know the answer i am merely asking the question.
Perseum wrote:What I need help on is this- Am I better off leaving it under one title and going dual occupancy, or, would I be better off subdividing and holding two titles? Are there any benefits in either?It depends what you plan to do with it.
If you intend to hold onto it and pull equity out, it is worth less to you as single title (since the overall site value will likely be less, but you'll likely find the LVR the bank will give you on a multi-occupancy site will not be as high as the LVR on a site with a single dwelling. This is because if the bank had to liquidate it, they have less buyers to trying and offload it to, because only investors would buy a multi-occupancy site. They couldn't sell it to the owner-occupier market.)
Generally it would likely be worth more subdivided, but be very sure you will not lose money in the process of making that happen.
All in all, you should choose whichever option makes the most money. Cut the numbers and let them answer the question for you
Jacqui Middleton | Middleton Buyers Advocates
http://www.middletonbuyersadvocates.com.au
Email Me | Phone MeVIC Buyers' Agents for investors, home buyers & SMSFs.
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