09 Sep Add a granny flat. Add value.
Backyard cricket pitch not getting much of a workout these days? Tired of your weekends being taken up with mowing and gardening? Installing a granny flat could be a lucrative solution – boosting the value of your home by 30% and adding around 27% as rental income.
That’s according to a combined analysis by CoreLogic and Archistar, which shows more than half a million east coast homeowners have enough free yard space to build a granny flat at least 60sqm in size.
Constructing a two bedroom granny flat obviously requires an initial investment. Small, single bedroom pre-fab granny flats start around $25,000 for a compact studio design. You can expect to pay up to $200,000 for a two bedroom dwelling. None of that, of course, includes council fees and cranes etc.
You can read the full report here.
The financial benefits of a granny flat
The report found that for a house worth $500,000, building a granny flat could add around $150,000 to the value of the property.
It also found that building a two bedroom self-contained granny flat apartment could add an additional 27% in rent each week.
CoreLogic head of research Tim Lawless says building a granny flat is becoming an increasingly compelling proposition for homeowners in a relatively lacklustre market.
“Many properties identified as suitable for a granny flat are in densely populated and traditionally expensive areas,” says Lawless.
Archistar co-founder Robert Coorey says many home-owners “are sitting on a pot of gold” in the form of excess land.
“The family benefits of a secondary residency can’t be overlooked, whether that’s giving adult children more privacy while they save for a mortgage, keeping loved ones close as they become more reliant on care or having additional accommodation for overseas visitors,” Coorey says.
The social benefits of a granny flat
Granny flats provide an excellent solution for multiple purposes and stages of life.
Providing an affordable housing option for the independent elderly, granny flats offer a rental option far cheaper than that of a retirement village. Granny flats can create more space for older children. Or could be used to house a newly married couple while they are saving for their first home.
Let’s not forget the original purpose of the granny flat. To house an elderly family member who might need a little family support.
The granny flat allows for independence, privacy and their own space, all valuable at any stage of life and reasonably priced.
How to assess your property’s granny flat potential
Unfortunately, we can’t build granny flats just anywhere.
The property must fall within the appropriate town planning rules. The land area needs to be large enough, and the existing property must be located in a position that allows for the development.
It’s also important to keep in mind the purpose of the granny flat. If you are housing an actual granny, will she require public transport close by? Access to hospitals/health providers? Or age appropriate activities and community groups?
Last but not least – finance!
If you have goals of putting in a granny flat, we can help. We have financing options that cover a broad range of scenario’s. From no financials, to ATO tax debts, to standard vanilla borrowers, we have a solution to fit your needs.
So if you’d like to run through your financing options, please contact us!
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