Dual key apartments: what are the pros and cons?
Dual key apartments can allow property investors to take two bites of the cherry and receive double rental income, but there are potential risks too.

Dual key apartments can allow property investors to take two bites of the cherry and receive double rental income, but there are potential risks too.
What is a dual key apartment?
A dual key apartment is one apartment that is divided into two dwellings. Both dwellings are typically self-contained and will include a bedroom, bathroom, kitchen and living space. The apartment may have a separate access point to each dwelling, or there may be a shared foyer through which there are two lockable doors to each one.
What are the potential advantages of dual key properties?
1. Potential to receive two incomes
For investors, the main advantage of a dual key property – whether that is an apartment or, more commonly, a house – is that they are dual-income investments. Just like duplexes and homes with a granny flat, this means they have the potential to generate two rental incomes.
Steve Stemp, a mortgage broker at dual key and duplex housing company Dual Key Homes, said the company’s largest market is investors looking to maximise the income from their property. “These investors are looking for a cash flow position where the property maintains itself through its rental income. In other words, it meets the interest payment and costs associated with that property.”
Of course, this expectation of cash flow assumes there is tenant demand for the property. As property investment adviser Michael Yardney notes, this may be limited: “Not everyone wants to share the front door or a yard or other things with somebody else,”
2. Ability to live in one dwelling while renting out the other
Another potential benefit of dual key dwellings is that investors have the flexibility to live in one half of the property and rent out the other half. This can help to subsidise loan repayments if the property was purchased using a home loan. Alternatively, the second dwelling could also be used to create more privacy within a family, and it could be occupied by other family members or a carer.
3. One set of fees
As dual key properties only have one property title, this means owners will only need to pay one set of council rates and, for dual key apartments, one set of body corporate fees. Duplexes however, incur two sets of council rates as they have two titles, two sets of rates and are two individual properties.
What are the potential disadvantages of dual key properties?
1. Small resale demand
One of the main potential risks of dual key properties is that they largely only appeal to investors, not owner-occupiers. This cuts out a large portion of the potential resale market, with a large number of properties owned by owner-occupiers. Most dual key properties are built with investors not owner-occupiers in mind and sold with investors in mind.
2. Stricter lending requirements
Investors may also need to meet tougher lending requirements, compared to a standard home or apartment. This may take the form of greater deposits and/or greater serviceability requirements for investors, given how reliant the investment is on high rental income. Keep in mind, however, that required deposit and serviceability levels would depend on the home loan provider and type of property in question. “Some banks and lenders have reservations on these,” Mr Yardney said. “They’re not as keen to lend because they know that if ever things go wrong and they have to sell, they can get stuck because there’s not as big a demand for it.”
3. Must be sold as one property
As dual key apartments only have one title, the dwellings must be sold as a single property and cannot be split. While some dual key properties could be converted into one large home or apartment down the track, this will likely come at a cost and could be difficult depending on the design of the property.
If you are considering investing in a dual key apartment, it’s important to do your own research about the market and the potential benefits and risks involved. It’s also a good idea to compare home loans to get the best deal for your individual circumstance. If necessary, it could also be important to seek financial advice tailored to your specific circumstances and needs.
Main image source: fizkes/Shutterstock.com
This article was reviewed by our Editor-in-Chief Nina Rinella before it was updated, as part of our fact-checking process.

The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
Try our Home Loans comparison tool to instantly compare Canstar expert rated options.
The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.