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    Knock Down Rebuild – Duplex Homes | Are They Profitable?

    July 6, 2023  

    As the price of housing continues to climb, many buyers find the homes they can afford in the suburbs they wish to live in aren’t particularly desirable. So why not knock down your home and build a duplex?

    It’s a solution that will see you fast-track your way to a brand new home, on your chosen block of land, all while paying off your mortgage faster. With two dwellings, you can live in one and rent out or sell the second to help you pay off your mortgage quicker – or if you’re a savvy investor, you could rent out both!

    Construction costs for duplexes can often work out to be a similar price as building a single dwelling. Yet you have the advantage of owning two homes and gaining instant equity.

    When it comes to duplex designs, gone are the days of hearing noise through the dividing wall. These days duplex homes are designed to feel just like a standalone home, with generous living areas, large kitchens and even four bedrooms.

    Benefits Of Knocking Down And Rebuilding A Duplex

    Providing enough room in the floor plan for all of your family members, new duplex or custom built new homes can be great investments. You might even choose to sell or rent the other duplex house to your extended family.

    Financial Benefits Of Building A Duplex

    • Rental income potential. The rental income you receive from a second house can help you pay down your mortgage quicker.
    • Separate titles. Sell one unit for profit while retaining ownership of the other unit.
    • Low maintenance costs. Building a new home, especially a low-maintenance duplex, is a great option to eliminate the cost of maintaining an older home on a bigger block of land.
    • Strong value growth. Duplex construction is a way to build growth in the property quickly, giving you instant equity.

    Personal Benefits Of Building A Duplex

    • A faster way to afford a new home. Duplex designs have evolved to offer the same space and privacy as a standalone home. The second dwelling will also allow you to become a homeowner sooner, whether you rent it out or sell it.
    • No need to move. Live in the same neighbourhood while earning rental income.
    • Multigenerational living. Building a duplex is the ideal way to accommodate extended family.

    Benefits Of Building A Duplex As An Investor

    • Take advantage of the strong rental market. Duplex homes provide owners with a dual income for the cost of one block of land.
    • Strong value growth. Use your instant equity to quickly reinvest.
    • Upgrade your investment potential. Knocking down a single family dwelling to rebuild a duplex home can see you double your investment potential while excluding land costs.

    Drawbacks Of Knocking Down And Rebuilding A Duplex

    • Paying for alternative housing. It’s quite an advantage to build a duplex as an investor, but if it’s your only home, finding somewhere else to live during the building process can add a substantial amount to your costs.
    • Potential for cost blow-outs. With the cost of building materials on the rise, a duplex price could potentially go over budget if you’re not using a reputable, experienced builder.

    Is A Duplex The Right Investment For You?

    Whether you’re an investor, have lived in your home for some time or haven’t moved in yet, there are a few questions you need to ask yourself that go beyond ‘how much does it cost?’ Here are some things to consider before you contact a builder of custom made homes in Sydney.

    • Is it worth building duplexes on your block of land? The duplex construction cost on a steep block is going to require higher demolition costs, rock removal and retaining walls. If you’re on a tight budget, you need to consider if the cost to build is worth it.
    • Does local council zoning allow duplex development? Before you go searching for a rebuild duplex cost, speak to your local council and seek information about any obstacles you may encounter with a knockdown rebuild, including required permits and future rezoning plans.
    • Is your local area a great place to invest? Your location should be in close proximity to employment, infrastructure and schools to classify as an area where growing families and renters will want to live.
    • Will you get bang for your buck? If you plan to sell one of your two dwellings you will have to pay tax on your profit. Once you’ve factored in demolition costs, the required permits and fees, the total cost to build a duplex and have estimated a final price, your profit margin should be high enough to make it worth your time.

    The Best Builders To Bring Your Duplex Dream To Life

    From fully-customised luxury double storey house design to practical solutions for all budgets, Sydney’s best builders, New South Homes can help bring your dream to life. Customer experience, accountability, transparency and quality are just some of the values we will bring to your build. With more than 35 years of experience building beautiful homes for our customers, you can be assured you can trust New South Homes with yours. Give our award-winning team a call today on (02) 9481 7441.




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