Obtain three written rental appraisals

Ask for appraisals of a new two-bedroom, three-bedroom and four-bedroom residence with comparable inclusions, parking and outdoor space. This allows the 3+3 and 4+2 configurations to be compared using the same local market evidence.

The appraisals should rely on genuinely comparable properties. A proposed new duplex residence should not be compared indiscriminately with every detached house in the postcode.

Model the complete cost and income

The feasibility should include combined gross rent, expected vacancy, management fees, council and water charges, insurance, maintenance, finance and holding costs, approval expenses and total construction cost. Any planned subdivision expenditure should be shown separately rather than assumed to be part of the build price.

A configuration with slightly higher rent may still be weaker if it requires substantially more floor area, wet areas or site work.

Stress-test the assumptions

Recalculate the project with rent slightly below the appraisal, a construction cost increase and a longer lease-up period for one residence. The investment should not depend on every optimistic assumption occurring at the same time.

Consider how the cash flow performs when one home is vacant or requires a major repair. This is where the balance between the two rents becomes visible.

Check the exit strategy before finalising the plan

If separate sale is important, investigate the approval and subdivision pathway before the architectural design and building contract are settled. Services, access, private open space, easements and title costs can affect the viability.

The best configuration is not necessarily the cheapest to build or the one with the highest rent on one side. It is the design that produces the strongest overall return while preserving two homes that tenants and future buyers will regard as complete and practical.

How ARK Houses can help

ARK Houses can coordinate the feasibility work that should precede a duplex commitment: site assessment, concept planning, approval considerations, scope definition and a buildable inclusions package. This gives the owner a clearer basis for obtaining rental and financial advice.

Discuss Your New Home

This article provides general construction information only. Site conditions, approvals, design requirements, product specifications and costs vary between properties and projects. Obtain advice for your circumstances before making building or investment decisions.