3 reasons why you should build a granny flat
A granny flat, or secondary dwelling, is a self-contained accommodation within, attached or separate to an individual home.
Like the name suggests, this type of accommodation was originally designed for an older loved one to live independently, but close to relatives in case they need support, while at the same time, giving both parties their own space.
In NSW the minimum lot size for a complying secondary dwelling is 450 square metres and the maximum dwelling size is 60 square metres. Depending on local regulations, it may be possible to convert attics, basements, or garages into granny flats too.
While there is paperwork associated with planning permissions, building regulations and other compliance to adhere too, it’s worth noting, there is no subdivision of your property needed; this means you still have all of your garden to enjoy!
If your property is suitable for creating a granny flat, here are three reasons why you should consider building one:
- Increase your property’s capital value
Adding a granny flat to your property can increase its value, giving you more return on investment when it’s time to sell the property.
The most important thing here is not to over capitalise, and spend too much in the construction process.
Speak to us and we can give you some idea of how much a granny flat will enhance your property’s value; we can also give you some more information of what makes a great granny flat, and what to consider when planning one.
- Enhance your lifestyle
As well as building a granny flat for older people, increasingly we’re seeing homeowners building them to enhance their own lifestyle.
It’s a cheaper option of creating more usable living space in a property instead of moving; we’ve seen some great home offices, gyms and even craft rooms in some of the houses we’ve been asked to sell.
Other homeowners have built them for the other end of the generation spectrum, and it’s a place for the teenage children to live/hang out in; this gives them the independence they desire, but at the same time, parents can keep an eye on them from a respectable distance.
For teenagers, they also enjoy being able to pop over for a family dinner too!
Plus, granny flats are a great option for giving guests a bit more privacy and space, particularly if they will be staying for an extended period of time.
- Create an additional income
With interest rates on the rise, a granny flat also has the potential to generate rental income while meeting demand for more affordable housing.
As well as usually being cheaper to build than buying a standalone investment property, here are some other reasons why granny flats are becoming a popular option for investors:
- Strong demand. Granny flats make an affordable housing solution for students, young couples and singles, and even retirees who are looking to downsize.
- Depreciation. There are extra claimables on a depreciation schedule – speak to a specialist to find out more.
- Can help you build a property investment portfolio. Adding value through a granny flat can potentially increase your capital value and rental income. This in turn may potentially allow you to release more capital for investment, while the rental income will be giving your income a boost – both of which make lenders look at you in a more favourable light, and may give you enough to purchase an investment property.
Again, speak to us and we can give you some realistic figures of what you can expect in terms of rental income.
Planning process
Whatever the reason you want to build a granny flat, the most important thing is to look at the different options available, get the correct planning permission, and know your budget and to do your sums.
For more details about planning, visit the NSW planning portal, and speak to a financial specialist who can advise according to your individual financial situation.
Want some more ideas of how your existing property can make you money? Or maybe you’re interested in investing in property. Either/or, we’re here to help!
With nearly 50 years in real estate and property management, our talented team is constantly looking for new and innovative ways to ensure your property investment experience is exceptional.
This is why we are one of Newcastle’s longest established property management companies, so give us a call on 02 4954 8833, send us an email to mail@apnewcastle.com.au or call into our Cardiff office for a chat.
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