What is a duplex and what’s it got going for it?

Imagine buying in your ideal location, on your own land, for about half the price of a house. Think we’re joking? Meet the duplex. A duplex home is one of the property world’s unsung heroes, often able to produce strong value growth and healthy rental yields for a much lower price than a pair of similarly located detached houses.

Want to know how duplexes fit in with other types of property? Here’s our full explainer on the various property types and which one could be a better investment.

What is a duplex?

A duplex is a residential building containing two homes that share a common central wall.

The pair of homes will either exist on one land title and be owned and sold together, or exist on separate titles and be individually owned and sold.

Owners must agree to a building insurance policy that covers both sides of a duplex.

A body corporate is not usually needed, although this depends on the age of the duplex and its jurisdiction.

You should contact the relevant authority in your state or territory for further details.

What is the difference between a duplex and a house?

A house is different from a duplex because it only contains one dwelling under a single roof, rather than two dwellings under a single roof. In a duplex, the two dwellings share one common wall, but are entirely separate entities with their own entrances and amenities.

Can you own half a duplex?

Yes, you can – although it depends on whether the two dwellings are on the same title, or on different titles. You will only be able to buy one half if the duplex has been subdivided into separate titles.

Why buy a duplex?

Buying a duplex has a number of benefits for both investors and regular buyers.

If you are an investor, buying a duplex means that you’ll receive two rental incomes from one asset. And building one means you’ll be able to earn almost as much rental income as you would from two detached houses while saving thousands on land costs, as a duplex requires much less land than two detached houses.

If you are a regular buyer, the main benefit is the price tag, which is often up to half of what you’d pay for a similarly located detached house.

This is great news for first-home buyers, anyone on a moderate budget, or anyone wanting a lowmaintenance lifestyle in a premium location, such as retirees and downsizers.

“This means you can either get into a better location for cheaper than buying a house in the same area, or, to put it another way, you can buy a home on your own strata land – great for longer-term capital gain – instead of buying an apartment with no land in a similar area,” says Eureka Buyers Agents’ Nicole Marsh.

To illustrate her point, Marsh gives the example of a client with a $700,000 budget who wants to buy a house in a prestige, waterfront suburb.

“This client could buy a duplex home in the same location for under $400,000, and still be in this premium suburb – that’s almost half the price.”

Of course, you’ll have to weigh the benefit of saving lots of money against the reduced sense of privacy.

Other perks include:

Only one adjoining owner, rather than hordes of neighbours found in an apartment block;

Potentially easy to make changes to your own home, as there’s only one duplex neighbour to consult;

You get the security benefits of having a close neighbour, without living “in each other’s pockets,” says Marsh.

You don’t have to give away pets, because you have your own land;

Potential boost to rental income due to absence of body corporate fees;

Low garden upkeep because you own half a standard block (ie 300-400sqm rather than 700sqmplus).

Potential pitfalls:

March says duplex configuration is crucial – “I don’t like duplexes where one is at the back because you can have the back neighbours walking past your bedroom windows late at night” – side-by-side or corner positions are better;

For strongest capital gains, try to buy where duplexes are the exception not the norm;

Avoid duplexes where front facades differ; colours should be uniform across both homes for maximum value. Momentum Wealth’s Damian Collins also believes duplexes are good investments, depending on location.

“Duplex properties are definitely good investment options for the right client if the duplex is in the right location,” he says.

“People looking at duplexes are often comparing them to apartments. The benefit of a duplex is that it has more land component size and value than an apartment.

“Historically properties with a higher land component value appreciate faster.”

Collins also points to some downsides to duplex investing.

“If you only own one of the duplexes, you are often limited in your ability to do external works to the property as it is part of a strata complex. This restricts ways you can add value to the property,” he says.

“Just like any property you buy, a duplex investment needs thorough research. The right duplex property can certainly make a great investment.”