Although he lives and works in Adelaide, to get the best return he would need to invest in another state, so the South Coast of NSW was decided. When choosing an area for a duplex investment, it is important to research the following:

• The demographic of the area-is it ageing, or are there young families moving in?
• Is there Government spending in the area for new roads, parks, facilities, infrastructure?
• Will there be a demand for a duplex type of property in the area
• Will the cost to buy and develop be beneficial- look at comparative sales in the area for new units compared to development costs.

Avoid:

• Locations with high housing commission properties as this may limit your growth.
• Area’s with decreasing population statistics.
• Area’s that have high proportion of renters compared to owner occupiers.

Areas that are predominantly tourist locations without other diverse industries.

The Land acquisition cost $285,000. When looking for suitable land, it is important to take into consideration the easements, sewer diagrams, storm water drainage, the land zoning (bush fire, flood) as well as the size of the land and whether it would be approved for a duplex. Each council will have separate rules which can be found on the council websites, and I will also confirm the particular site is suitable with a local town planner. The land size we purchased was just under 900Sqm which is permissible for a duplex construction with this council.

The Construction cost was negotiated to be $842,746 – and this included council costs and subdivision, full turnkey. We used a reputable builder after sourcing and receiving quotes from a number of different builders. We performed a background check and ensured that the builder would provide the best quality for the price, he had adequate insurance, and had a reputation to complete projects in the given time frame. I also like to work with builders who have excellent communication skills so we are always on top of where the build is at, and we can get right on top of any decisions that need to be made, or we are able to quickly fix any issues that sometimes come up. The duplex units are both 3 bedrooms, 2 bathroom with 2 parking. Which suits the demographics in this area of young families, and professional working couples who are moving into the area.

The total Land and construction totalled $1,127,746.30. This project took approximately 18 months and upon completion, the duplex unit was valued at $980,000 each. Total $1,960,000.

The resulting equity in the deal was $832,253.70- which is a 74% return! Currently, the units are tenanted at $680 per unit. $1,360 per week for both units providing excellent cash flow and a 6.3% yield.

What’s next? This client is going to use his equity gains to go onto his next investment project, and this is how he is going to grow his portfolio.