How to Finance a Dual Occupancy the Smart Way

If you are thinking about doing a dual occupancy development, you might also be wondering how to finance a dual occupancy.

Colin Fragar, our founder and CEO, shares what he’s learned with his experience in financing dual occupancies.

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Or for those that prefer to read, here is a transcript of the video…

So how do you finance at Dual Occupancy the smart way? My name is Colin Fragar from the Council Approval Group. And having done this personally for myself and done over 1000 projects for our clients, I know what it’s like to think – Okay, I think I can get to Dual Occupancy, but how am I going to finance this?

I want to give you some thoughts around that. Obviously, I’m not a financial adviser but I have done the school of hard knocks and so I can share with you those tricks.

So, a Dual Occupancy literally adds hundreds of thousands of dollars to one’s portfolio. That’s been my experience. Whether you’re able to pull off a dual occupancy subdivision or you just have two awesome high performing rental properties back to back or maybe you want to live in one of them and the other one’s for your mum or family member. Whatever your reasons for doing dual occupancy, the reality is you’re not going to pull it off unless you finance it.

Tips for Financing a Dual Occupancy

So in terms of financing a Dual Occupancy, it really depends on what Dual Occupancy type you’re going for. So, there are a few different scenarios for that.

The good news is that banks, if you are looking at doing Dual Occupancy, banks and most lenders, will allow for a construction loan where there are two properties on one title.

As soon as you go to three properties like multi-unit housing, townhouses, and that sort of thing, it gets into a different layer of lending, sometimes commercial lending. But a Dual Occupancy is generally smiled at by most lenders, so that’s the good news.

Consider the Value of DA Approval

The thought that I have for you is this. This is one that I did recently. It’s a property that my wife and I owned and what it was was a dual occupancy. We had an existing house, so this is an example where there’s an existing one.

We only needed to come up with around $300,000 worth of finance to be able to build the dual occupancy. The lender was able to find enough equity in our property because of the approval that we had received.

So that’s an important point for anybody who’s thinking about getting council approval. When you do get that council approval, it does add value instantly to your property. You might have seen DA sites. They call it a DA site for sale. It’s already been approved and people charge a premium for that.

So if you’ve got your approval, often there is some latent equity, some untapped equity or lazy equity that you can use to capitalise. As well as that, most lenders will do a 100% construction loan depending on your financial situation. Obviously, you need to talk to a good mortgage broker about this. But if you’re thinking about doing a dual occupancy, the first step is to see what’s the likelihood of getting approval, if you haven’t got it already. In order to do that, I would like to bring you back to a couple of resources.

Resources to Get Started

The first is Your Ultimate Guide to Achieving Council Approval. So this is something that we put together to help people like you with a lot of tips and tricks in there about dual occupancy. The second thing is to make sure that you jump onto the telephone or onto our website and book in a 30-minute consultation with one of our team. We can go through what your dreams and ambitions are and really help you to create a roadmap for your future in terms of property and getting council approval.

Thank you for watching. My name is Colin Fragar and I wish you every success.