If you are looking for new property investment opportunities, you might have come across a property that was listed as a “dual key unit”. If you are not sure what a dual key unit is, you have come to the right place! We are here to answer all your questions about dual key units as a property investment, so keep reading!
What are Dual Key Units?
In essence, a dual key unit is one housing unit that has been split into two self-contained dwellings. Apart from sharing a common address and entrance hall, the two dwellings are separate for all intents and purposes – they each have their own kitchen, bathroom, and bedrooms, and they each have their own separate, lockable entrance from the shared entrance hall. A dual key unit can pretty much house two separate households with minimal interaction between the two.
Pros of Dual Key Units
There are plenty of reasons property investors might find themselves drawn to dual key units, but their key investment value lies in this: two homes under one address. It might not sound like much, but the implications are huge in terms of the returns on your investment! Here are some things that make dual key units a good investment:
You can rent out your home and live in it
When you buy a residential property, you would usually need to choose between two possible ways to use the home: live in it, or rent it out. You don’t need to worry about that with dual key units! With dual key units, you can still continue to live in one portion of your home, while renting out the other. So your home can serve both as a place to live and as a source of rental income. Now, we know what you’re thinking – “In any home, can’t I just rent out a portion of the place?” Well, of course you can! But a living space in a dual key unit might be easier to rent out, because of the additional privacy it offers both you and your tenants. Plus, you don’t need to share your kitchen and living space either. Talk about having your cake and eating it too!
Cheaper option for a property investment
Instead of paying a hefty 12% Additional Buyer Stamp Duty (ABSD) on your second property purchase, dual-key units are a good investment option because you get to own 2 units, side-by-side without having to pay for ABSD as they are counted as one property.
Higher Rental Yield
When renting out a property, dual-key units generally garners a higher rent as compared to a single unit. Take for example, a four-bedroom unit may be able to fetch you a rent of $8,000 but a separate 1-bedroom and 3-bedroom in a dual-key unit may rent for $9500 instead.
Because the two units are so close together, you get plenty of flexibility as to how you want to use it. The two living spaces in dual key units are generally not of the same size, so you could choose to live in the smaller one and rent out the larger one, and vice versa. Alternatively, you also have the flexibility to rent out each unit to separate tenants. Dual key units are also a practical option for large families who want to live close by yet maintain their own personal space. Whatever you choose, dual key units can be extremely versatile in purpose!
Cons of Dual Key Units
As with every potential investment opportunity, there are some drawbacks and risks. Here are a few you might run into when investing in a dual key unit.
Hard to cash out on capital appreciation
Because of the special structure of dual key units, you might find that it’s something of a niche market. This means that if you buy a dual key unit and want to sell it off in a few years, it may be harder to find sellers, simply because fewer home buyers need such a unique arrangement in their home. To top it off, dual key units tend to go at a higher price than a regular apartment of the same size, which further pushes potential home buyers to look at other places too. So, the key to addressing this issue is to choose a development with high rental demand and near amenities, which will be attractive to potential buyers.
Dual Key Units in Singapore
Before investing in a dual key unit, you might want to take the time to think through all these factors carefully. Dual key units can be a good investment option, but only with the right mix of situations coming into play. It is always good to seek financial advice before making such a big purchase, but if you eventually do decide to go for it, here are a couple of dual key units you can look at in Singapore.
Credit: Bukit Sembawang
8 St Thomas
Location: 8 St Thomas Walk, Singapore 238113
Tenure: Freehold condominium
Type of Unit: 4 Bedroom Dual Key
10-minute walk from Somerset MRT
15-minute walk from Fort Canning MRT
Credit: Roxy Pacific Holdings
Neu at Novena
Location: 27 Moulmein Rise, Singapore 308140
Expected TOP date: May 2023
Type of Unit: 3 Bedroom Dual
3-minute walk to Novena MRT
Credit: CEL Unique Development Pte Ltd
Location: 3 Woodleigh Ln, Singapore 347693
99-year Leasehold Condominium
Expected TOP date: 2021-2022
Type of Unit: 2 Bedroom Dual Key
3-minute walk to Woodleigh MRT
Credit: Far East Organisation
Location: 18 Holland Grove Rd, Singapore 278800
Expected TOP date: late 2023
Type of Unit: 2 Bedroom & 3 Bedroom Dual Key
Disclaimer: PropertyHunter is not responsible for inaccuracies.