How to Secure a Below-Market Second Dwelling Investment Property with Expert Help

Australia’s property landscape is evolving, and the ability to add a second dwelling to your property (think a granny flat, a dual occupancy residence, or a small second home) has never been more appealing.

For savvy investors, securing a below-market second dwelling property can accelerate wealth creation, diversify your portfolio, and deliver superior rental yields. But if you want to find value and keep headaches to a minimum, expert help is essential.

In this guide, you’ll learn what “below-market” really means, how to uncover hidden opportunities most buyers miss, how the new rules can work in your favour, and why leveraging experts transforms your investment odds.

Second Dwelling Investment Potential in Australia

Adding a second dwelling to your property allows you to tap into multiple income streams and magnify your long-term capital growth.

The benefits include:

• Higher rental yields compared to single-dwelling properties
• Accelerated equity growth from adding value via development or renovation
• Diversification of your property portfolio
• Access to tax benefits linked to investment properties

The market appeal is real: demand for smaller, flexible, multi-generational, and affordable housing is surging across Australia’s major markets.

What Does “Below-Market” Mean?

Simply put, a below-market property is acquired for less than its typical value—often because the sale is off-market, urgent, or the property has untapped potential. How do investors discover below-market deals?

• Off-Market Opportunities: Many of the best buys are never publicly listed. Agents, buyers’ advocates, and property consultants often have access to these deals before the masses.
• Distressed Sales and Inherited Properties: Sometimes, urgency (like settlement, debt, or inheritance) leads owners to sell quickly at a discount.
• Properties with Potential Value: Homes that could legally accommodate a second dwelling, but haven’t yet, are underrated gems.

Dual Dwelling Investments, for example, specialises in sourcing off-market, high-yielding second dwelling sites for clients—an advantage investors rarely get on their own.

Looking for a granny flat investment property in Brisbane, Geelong, or Melbourne? At Dual Dwelling Investments, we pride ourselves on delivering a stress-free property buying experience backed by our extensive industry knowledge and proven track record.

How to Finance Your Second Dwelling Investment

You don’t need buckets of cash to get started. In fact, if you already own property, you might be able to use your equity as your deposit.

Common financing pathways include:

• Equity Release / Refinancing: If your existing property has increased in value, you may be able to refinance and use the equity as the deposit on your second dwelling.
• Line of Credit: Access a set amount of funds against your property equity.
• Specialised Investment Loans: Many lenders offer dual occupancy-specific loans, with the property’s increased earning potential taken into account.
• Alternative Lenders and Advance Rent Options: Solutions like advance rent (e.g., Futurerent lets you access up to two years’ rent in advance to use as a deposit) can also help get your foot in the door.

Tip: An experienced investment advisor or mortgage broker can pinpoint the cheapest, fastest, and most tax-effective structure for your second dwelling investment.

Legal Requirements and Planning Changes

As of March 2025, Victoria has made it much easier to add a small second home (up to 60m²) to your property. Here’s what matters most:

• Permits: In most cases, a small second dwelling won’t need a planning permit, but a building permit is always required.
• Eligibility: One second dwelling per lot (more with council approval), residing on the same lot, fully self-contained, and with an independent external entrance.
• Rental Flexibility: There are no restrictions on who can live there—perfect for investment, family, or multi-generational living.
• Other Requirements: Must not be subdivided or separately titled; cannot connect to gas; must meet siting, access and open space regulations.

Each state and territory has its own planning requirements, so always check with your local council or the relevant building authority before buying or building.

Where and How to Find Below-Market Second Dwelling Investments

Finding genuine below-market opportunities takes legwork, networks, and negotiation. Here’s how experts make it happen:

• Network Access: Buyers’ agents, property advisors, and specialised companies have established networks that give you access to properties before they hit the public market.
• Due Diligence: They check zoning, overlays, easement restrictions, and ensure the property can legally accommodate a second dwelling now or in future.
• Negotiation Power: Skilled investors negotiate harder, often structuring deals with flexible terms that benefit both sides.
• Comprehensive Support: Experts guide you from property identification through due diligence, finance approval, negotiation, build management, and even tenancy set-up.

Step-by-Step: Securing a Below-Market Second Dwelling Investment Property

Identify Your Goals

Are you after cash flow, capital growth, portfolio diversity or future flexibility for family needs?

Engage an Expert

Contact a buyers’ agent or specialist with a strong second dwelling track record, such as Dual Dwelling Investments.

Finance Assessment

Review your borrowing power and unlock equity or loan options with a finance specialist.

Source Hidden Opportunities

Leverage expert networks for off-market or pre-market deals.

Complete Due Diligence

Scrutinise property for legal, planning, and site suitability—don’t skip this step.

Negotiate the Deal

Let experts negotiate a favourable price, deposit terms, and development flexibility—often saving tens of thousands.

Secure Permits, Design and Build

Ensure compliance with new regulations, and use a registered builder familiar with small second dwellings.

Post-Purchase Management

Consider using property management to secure reliable tenants and maximise rental yield.

Searching for a multi dwelling investment property in Geelong or Brisbane? With our end-to-end project management and deep understanding of dual occupancy developments across key Australian regions, we’ll guide you through every step – from property selection to construction completion.

The Difference an Expert Makes

Trying to navigate the complex Australian property market on your own is daunting, especially with the rules changing so quickly.

Dual Dwelling Investments, for instance, handles everything from acquisition to planning to post-purchase support, giving you access to deals, expertise, and results you simply can’t get by going solo. That’s the difference between “just another investment” and a high-performing portfolio asset.

Is Now a Good Time to Invest?

Despite rising property prices, second dwelling opportunities remain attractive.

As of February 2025, median dwelling values reached $815,912 nationwide, with yields particularly strong in mid-sized capitals like Brisbane (11.03% YoY growth), Adelaide, and Perth. Victoria’s market has seen stability or modest change, but adding a second dwelling creates value and beats simple capital growth.

What Yields and Returns Can You Expect?

Case studies show yields of 6.8–7.2% and equity uplifts of $100,000–$210,000 post-development in Victoria alone—exceptional figures compared to typical residential investment.

What Are the Hidden Pitfalls?

Potential risks include:

• Council Red Tape: Not all land qualifies—check overlays, easements, or restrictive covenants first.
• Surprise Costs: Be ready for connection fees, site preparation, or unexpected build overruns.
• Oversupply Risk: Some areas might face future rental oversupply if many investors build similar dwellings simultaneously.

Solution? Get legal and professional checks done before you commit.

Partner with Dual Dwelling Investments Today

Ready to secure a high-performing, below-market second dwelling investment property? Don’t let opportunity pass you by. Partner with Dual Dwelling Investments for exclusive access to off-market deals, expert guidance, and true end-to-end support. Book your free, personalised consultation today to get started on your journey toward maximising your property’s income, equity, and future value.

If you have any other questions or want to discuss your options, reach out now. Making even one smart below-market investment today could set you up for financial security and freedom well into the future.

Looking for a multi dwelling investment property in Victoria? Schedule a complimentary consultation with us today.

Frequently Asked Questions

Can a second dwelling be rented out, or must it house a family member?

You’re free to rent it to anyone (not just relatives), increasing flexibility and rental income.

Can I subdivide the second dwelling and sell it separately?

Not typically—most states, including Victoria, require both dwellings to remain on one title.

How big can my second dwelling be?

Victorian rules allow up to 60m² floor area for a small second home; other states may vary.

Do I need council approval?

A building permit is always needed, but planning permits may not be, depending on the lot and compliance with regulations.