An Investor’s Guide to Multi-Income Properties
When it comes to building a booming property portfolio, diversity is key! This means purchasing a number of different types of properties in a range of locations to maximise your opportunity in the marketplace. When employing this strategy, many investors stick with houses and apartments, but multi-income properties can be a cash-flow accelerator…that is, IF you know what you’re doing.
But first, what is a multi-income property?
Essentially, it’s one building that gives you more than one rental income. Now while extra money in your back pocket does sound great, this style of investment doesn’t come without pros and cons.
TYPES OF MULTI-INCOME PROPERTIES
There are four primary multi-income types that Australian investors can buy at the moment. They are:
- Dual income property
- Duplex
- Rooming/boarding house
- NDIS housing
Each type of multi-income property comes with its own set of challenges for an investor, and it’s not always the type of property you’ll want to start your investment journey with.
Most multi-income properties involve some level of “hands-on” time and need more attention than a single-income investment.
But, once your investment journey is underway and your cash flow is positive, a multi-income property could be a way to fast-track your portfolio and give your income stream a boost. Let’s explore each type.
DUAL INCOME PROPERTY
One title, two incomes. From the road these properties look like one home, but they are actually split, resulting in a 1-2% increase in potential rental yield.
One part of the property is usually smaller – think a one bed apartment or granny flat vs a larger 3-4 bedroom home.
The only real challenge with this kind of multi-income property is finding a property manager who understands how it works and will take care of both properties for you in the right way. This is because dual incomes aren’t as common as single-income properties, however once you find a professional who has experience in this area, you’ll be away.
DUPLEX
Two titles, two incomes. This property is very obviously split. Commonly sharing a wall or part of the building, duplexes are two properties that happen to be joined.
Different from a dual income property, you can sell one half of a duplex, whereas dual income properties you have to sell as a whole. This obviously gives you flexibility and the potential for greater capital growth and gain over time.
One of the downsides to duplexes are the rates that some councils charge for this kind of property, so make sure you know what you’re getting into from the get-go.
ROOMING OR BOARDING HOUSES
Buy a big house, split the rooms into separate units, and rent them out.
While the potential to increase rent yield is significant, the myriad of issues with this kind of property make it a no-go for most investors.
Banks and lenders don’t like them. Insurers don’t like them. Even the Fire Brigade doesn’t like them.
Unless you’re very experienced running this kind of property and want a very active investment role, steer clear.
NDIS HOUSING
The National Disability Insurance Scheme is a state and federal managed system that assists people with a disability, and their family and carers.
Specialist Disability Accommodation (SDA) is quality housing that is built specifically for people with disability and caters to their set of needs.
SDA is usually slightly more expensive to build and equip than standard housing and includes things like wide doorways, ramps, and support systems in bathrooms, kitchens and bedrooms.
Investors can benefit, not only from the multi-income yield across rent and subsidy payments, but also knowing they are assisting those who need specialised housing.
Read more about NDIS options for investors here and here.
DEVELOPING YOUR INVESTOR STRATEGY
If you’re thinking about investing in a multi-income property, get some expert advice from the coaches and mentors at Positive Real Estate who have decades of combined experience in all kinds of investments.
Better yet, sign up for one of our free information and education events, where you’ll be equipped with the tools, resources and support to thrive, and not fall behind on your path to financial freedom – whatever that may look like for you.
Learn more about how you can take advantage of the current property market today.
Click here to like us on Facebook and see more updates like this.
Hey there, do you enjoy the Positive Real Estate Blog? If you did, why don’t you book into a Property Information Night in your area and get more information from our team. You can do so here.
Tenant Troubles: The Risks of Renting to Friends – Pt2 with Bob Provan
In this episode of Property Investor Tales with guest Bob Provan, we delve into the complexities of self-managing rental properties, particularly when friendships are involved. Bob shares his personal experiences with renting to a friend, the challenges that arose, and the lessons learned about the importance of professional property management. From the emotional and financial burdens of self-management, to the complications of tenant relationships, Bob had the decision to transition to a professional property manager. Through our experiences, we’ve seen that there is a need for education and support in the property investment journey and I hope this episode can help all investors learn a thing or two.
How to Generate Wealth From the Property Cycle – With Sam Saggers
In this episode of Wealth Coffee Chat, Sam Saggers from Positive Real Estate discusses the current state of the real estate market, focusing on the property cycle, economic indicators, and the dynamics of belief versus value in property investment. Sam walks us through the importance of understanding employment rates, inflation, and supply issues in the housing market, while also exploring future trends and potential price increases in real estate. How much do you know about the property cycle? Let’s Wealth Coffee Chat!
This 1 Thing Could Negatively Affect Your Property’s Rent.
Welcome to Property Management Wednesday’s! In this episode of Wealth Coffee Chats, Cass Sjostedt from R&W Plus discusses the importance of understanding tenant demand and how floor plans can significantly influence rental success. Cass walks us through some tips on how to secure tenants faster by avoiding common pitfalls related to property presentation and layout. Is there a direct connection between presentation, floor plans and expected rent in 2025? Let’s Wealth Coffee Chat!
How Society Keeps You Broke
This week we discuss the growing contrast of wealth in Australia and the challenges faced by property investors and the broader economic landscape. Explore the implications of lifespan, work span, and health span on financial planning and wealth accumulation. All the way from the significant wealth transfer expected in the coming decade, to individuals being unprepared for the financial realities of aging and economic shifts. This episode is full of insights into becoming a better property investor. Tune in now!
Unlocking the Power of Trusts in Property Investing
In this episode of Wealth Coffee Chats, Daniel McPherson from the Positive Tax Solutions team discusses the intricacies of trusts, particularly discretionary trusts and their relevance in property investing. What are the benefits they offer? Asset protection, tax minimisation, and increased borrowing capacity. Do you want to know more? Let’s Wealth Coffee Chat!
What Do You Do When You Hit a Wall Trying to Buy Property?
In this episode of Wealth Coffee Chats, Tabitha Bright from Positive Real Estate’s adviser team discusses the critical phase of consolidation in property investment, emphasising the challenges investors face, such as financial barriers and market fears. Tab shares some personal experiences and insights on navigating these challenges, highlighting the importance of having a solid plan and being proactive in overcoming obstacles. Are you in the consolidation phase of your journey? Let’s Wealth Coffee Chat!
When Is the Right Time to Refinance Your Home Loan?
In this episode of Wealth Coffee Chats, Cang Dang from Positive Money discusses the importance of refinancing home loans, especially in the context of changing interest rates and personal financial situations. What are the key signs that indicate it may be time to refinance? It all depends on financial circumstances, the length of time since the loan was taken out, and the potential to leverage equity for investments. But when is the right time for YOU? Let’s Wealth Coffee Chat!
Do Discounts Exist in the Australian Property Market?
Can you create INSTANT equity from your property investment purchases? Absolutely you can. In this video Positive Real Estate’s Jason Whitton breaks down the step-by-step blueprint to generating instant equity from property discounts, as well as walking us through the multitude of ways that investors can find great discounts on their purchases. How? Let’s Wealth Coffee Chat!
The Cure To Anxious Investment
Do you get anxious about investing in property? You’re not alone. Join us on the new episode of The Urban Property Investor, where we’ll discuss how to invest in property even if you have anxiety.
We’ll share tips and strategies for making informed decisions and managing your anxiety so that you can invest with confidence. Tune in and learn how to overcome your anxiety and become a successful property investor.
Can You Earn $200K a Year and Pay Zero Income Tax? Yes You Can.
Join Jason Whitton and Dr. Andrew Wilson in this episode of Wealth Coffee Chats as they delve into the latest developments in the Australian property market. They’ll cover key topics including interest rates, housing trends and the economic forces shaping real estate investments. Discover the effects of declining inflation, possible interest rate reductions and how different housing markets across Australia are responding. Let’s Wealth Coffee Chat!