Where is the yield? - The Community Leader and Real Estate New and Views
Real Estate


With property prices on the rise and land becoming more valuable, chasing down the best performing real estate assets has become more crucial than ever. Parallel is the task, for a growing group of property buyers, of maximising lifestyle while allowing for extra supplementary income. Moving toward semi-retirement or monetising redundant space within their existing dwelling is on the radar for what is now the biggest slice of the demographic pool: baby boomers. As new investors start to lean into the investment arena, dual occupancy properties may appear enticing, but it’s important to understand planning codes.

The purpose of this article isn’t to provide investment advice, but rather to explore ideas around dual occupancy/dual key properties, and for this we sat down with Ellen, a qualified town planner with Gateway Survey and Planning.

Firstly we discussed homes for one household (family/relations living under the one roof). The planning scheme in LDR zone (Low Density Residential) allows for a secondary dwelling (granny flat), which needs to be no greater than 80m2 GFA (gross floor area), and built within a distance no greater than 20 metres from the primary dwelling. Council expects that this is also used for family/relatives on a non-commercial basis.

This type of property can be rented out; the secondary dwelling would be part of the same lease, and not rented out to a third party. One lease equals one household.

An alternative would be to live in one of the dwellings as your PPOR (primary place of residence) and rent out the second dwelling for the extra income, which at this point in time council has been okay with.

We then discussed a dual key property, which technically would be built as a primary residence, with a secondary dwelling classed as a granny flat. This could be two dwellings built next to each other, joined by a common wall, detached from each, other or be an upstairs/downstairs arrangement. Quite often they are referred to as houses with ‘flexible layouts’.

In most cases the planning scheme allows for these dual key properties to be built, however it’s their use that comes under scrutiny. Prior to 2014, it was a much more common practice for investors to buy/develop dual key properties, as this helped achieve higher yields, usually around the 6-7% range. However, council was not (and is still not) supportive of dual key properties as they generally involve two leases and as such are occupied by two households.

A dual key house is not to be confused with a dual occupancy (e.g. a duplex) which requires a DA for two attached/detached self-contained units which can be strata titled. Dual occupancies are not supported in the low density res zone.

The current trend for investments, particularly as planning changed in 2014, has been properties that are designed for rooming accommodation purposes. This may be a less straight forward arrangement than a single lease, but more profitable (with a higher yield) in most cases. Typically rent includes water, internet and electricity. Council intended to open up viable accommodation for students, which was a big thing prior to Covid 19. Subsequentially, the market for both investors/developers creating these types properties, coupled with the end-users of the renters, has seen this segment really expand in our area over the last few years, students or no students.

Rooming accommodation tenants include mature women living by themselves on limited income streams, fly in/fly out workers, pilots that may live in one state, but are based currently in another, and interestingly divorced couples with kids, where they keep the family home, and the parents take turns swapping the rented room accommodation, to save having the kids shuttle between two properties.

Ellen says rooming accommodation rules allow for up to a five-bed rooming configuration, within LDR zoning; six bedrooms or more will trigger DA requirement. The value of the actual property as a rooming accommodation specific house may vary from it being a standard single dwelling home.

In summary, be mindful that purchasing a dual key property as an investment will have its challenges by way of planning codes. As always, seek professional advice before taking the leap, and make sure the type of dwelling compliments your specific investment goals.