What You Need to Know About Investing In a Granny Flat
Traditionally, the granny flat has been seen as an alternative to aged care for the elderly or as a way to add additional room to the family home. Recently and especially in the current economic situation, granny flats have gained momentum as a popular way to earn additional income from an existing property.
Affordable housing can be tricky to find, especially in areas of high demand. As a self-contained secondary dwelling, granny flats offer low-maintenance and affordable living in comparison to renting a full sized home.
Many people who have large existing properties with unused space in their backyard are turning to this type of investment due to the rental market demand and ability to earn a high rental income from a relatively low initial outlay.
Granny flats offer endless possibilities to generate income from your existing property: whether as a short term rental to take advantage of increased rent during peak holiday periods, or as a long term rental which will generate a reliable and fixed income, a granny flat is a great way to maximise the income from your property.
Before you design and construct your granny flat, it is important to check the rules and regulations with your local council as well as seeking financial advice if you intend to use your granny flat as an investment. As a guide, your granny flat will generally need to meet the following criteria:
- Be the only granny flat on the property
- The property must be zoned for residential use
- Have a maximum living space of 60 square metres.
For a more comprehensive explanation of granny flat regulations in New South Wales, check out our guide here.
The costs of building a granny flat can vary depending on the type of granny flat you want to construct and the site conditions of your property. In general, most granny flats start at $99,000.00 ex GST for a two bedroom granny flat.
This is a small investment cost when compared to the potential rental return your granny flat can generate – in most cases, the rental income generated offsets any mortgage repayments. As well, this type of investment is usually more affordable in comparison to buying a second standalone property, making it ideal for those wanting to kickstart their investment portfolio.
A site inspection and tailored quote will assist you in creating a budget for your project and managing the expected expenses involved.
Adding a granny flat to your property is a great way to increase its value as it provides an additional independent living space to the main home, perfect for tenants or housing relatives. Having this additional option on your property is an attractive benefit to potential buyers and can significantly impact the price you may receive at sale.
Acrow Investments are the local experts when it comes to granny flat construction, having earned a great reputation for building high quality granny flats across the Central Coast, Lake Macquarie, Newcastle and Hunter Regions. Whether it is for personal or investment use, our team of property experts will be able to guide you through the approval and construction process to ensure you receive a completed granny flat that suits all of your needs.
Contact us today to discuss the benefits of adding a granny flat to your property.
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