Dual-key units have grown in popularity in recent years, especially among property investors and multi-generational families in land-scarce cities like Singapore. Designed with two separate entrances within a single title, dual-key units offer a unique layout: one larger main unit and a smaller sub-unit, both sharing a common foyer. While they provide flexibility and potential rental income, they are not without drawbacks. Below is a comprehensive look at the pros and cons of dual-key units.

Pros of Dual-Key Units

1. Rental Income Without ABSD

One of the biggest advantages of dual-key units is the ability to earn rental income without purchasing a second property—and without incurring Additional Buyer’s Stamp Duty (ABSD). Since both units are under a single property title, buyers can effectively lease out one part of the unit while staying in the other.

2. Ideal for Multi-Generational Living

Dual-key units are well-suited for families who want to live close together while maintaining privacy. Parents and adult children, or even siblings, can live in separate but adjoining units, reducing family friction while allowing proximity.

3. Flexible Use

Owners can choose to live in the larger unit while renting out the smaller studio for income, or even switch roles as family or financial needs change. Some also use the sub-unit as a home office, guest room, or space for a helper.

4. Efficient Use of Space

Unlike buying two separate units, dual-key layouts maximize the use of space and avoid duplication of common areas like kitchens and living rooms in the main unit, leading to more cost-efficient living.

5. Attractive for Investors

Investors looking for steady cash flow often see dual-key units as an opportunity to maximise rental yield while only holding one mortgage. This can be appealing in markets with cooling measures.

Cons of Dual-Key Units

1. Higher Purchase Price and PSF

Dual-key units typically cost more per square foot (psf) than regular units, due to their unique layout and dual utility. Buyers may end up paying a premium for the added flexibility, which might not always be justified in a soft rental market.

2. Smaller Sub-Unit Space

The sub-unit is often compact, with limited cooking facilities and reduced living space. This may limit tenant appeal, especially for long-term renters who prefer more full-fledged amenities.

3. Limited Supply and Demand

Not all developments offer dual-key configurations, and not all buyers are looking for them. This may limit resale options in the future, especially if the market tilts back to more conventional layouts.

4. Financing and Valuation Challenges

Some banks may be more conservative when valuing dual-key units, affecting loan quantum. Also, buyers should check with the developer or seller whether the sub-unit has proper approval for tenancy or usage, especially in older developments.

5. Shared Utilities and Noise

Even with separate entrances, both units may share utility meters and balcony. This can result in disputes over bills or reduced privacy due to sound transfer and shared walls.

Newer property projects tend to have fewer dual-key units due to several key reasons:

1. Limited Market Demand

While dual-key units appeal to niche groups (like investors and multi-generational families), the mainstream market prefers regular layouts. Property developers often prioritize unit types with broader buyer appeal to maximize sales.

2. Higher Land and Construction Costs

Dual-key units require more complex internal layouts, additional plumbing, and sometimes duplicate facilities (like pantries or bathrooms). This increases construction cost per unit. Developers may prefer simpler, more efficient layouts that yield better margins.

3. Tighter Urban Planning Rules

Urban planning guidelines and building regulations may limit how space can be partitioned and used. Authorities may discourage dual-key units if they’re misused as “quasi-duplex” rentals, which blur the line between legal and illegal subletting.

4. Changing Buyer Preferences

Modern buyers, especially young professionals and couples, prefer open-concept layouts with larger communal spaces. Dual-key units may feel cramped or inefficient to those not using the second unit.

5. Regulatory Concerns over Subletting

Authorities in some markets (like Singapore) are tightening enforcement against improper subletting and "shadow landlord" practices. This leads developers to reduce dual-key offerings to avoid regulatory scrutiny.

6. Focus on Smaller Units

Due to affordability concerns, developers increasingly build smaller 1- and 2-bedroom units that are more marketable. Dual-key configurations usually need larger floor areas (typically 900+ sqft), which are harder to sell in today’s cost-sensitive market.

Conclusion

Dual-key units can be a smart choice for specific buyer profiles—particularly investors seeking rental income without additional ABSD, or families looking for privacy within proximity. However, buyers should weigh the premium price, future market demand, and functional limitations of the layout. As with any property investment, understanding your long-term needs and conducting thorough research is key before committing to a dual-key unit.