Granny flats to improve property up to 21%
A modular home building company is calling out for investors and first home buyers to consider adding a granny flat to their property, claiming a potential yield of investment between 13 to 21 per cent depending on location.
Housing affordability is always in the minds of both investors and first home buyers, and How-Nano Home’s managing director George Nori says granny flats are the answer to both adding value to a property, or providing additional housing.
“Although interest rates are at record lows, many Sydney first home buyers are still despairing at property affordability,” Mr Nori said.
However, with the first home buyer amendments coming into effect soon, those who intend to purchase a property for the first time will have various concessions granted, saving them a considerable amount of money. Mr Nori suggests these savings can be put towards a granny flat in order to raise the value of the property.
While this can help improve the value of a first home buyer’s property, this too can help out investors, with Mr Nori saying it can improve the return on investment by 13 to 21 per cent.
“For a normal house, [yields] … are sticking around the 3 per cent mark, or up to 4 if you’re lucky, but that’s generally what investors are looking that,” Mr Nori said.
“I gave details to a client who’s installing one of our products in Tempe, I set the specifications to a managing agent ... and she came back with a quote on the granny flat of $650 a week for a two-bedroom granny. That’s a pretty good investment.”
In order for investors to get on board with adding a granny flat, Mr Nori says the first thing that needs to be done is to determine the equity position the investor is currently in. If there is sufficient equity, then he says the next step is to appraise the land.
Lastly, Mr Nori says the last box to tick is to determine what kind of rental return is achievable, which can be done by analysing the rental returns the suburb of the property is located in.
“If you get green lights with that, then you can comfortably proceed with a pretty safe investment,” Mr Nori said.
- What are the rules on this on the Geelong, Victoria area or Victoria in general?
In an already owner occupied house with a reasonable backyard, can you build a detached granny flat, put up a couple of fences (corner block) and rent the granny flat to a third party?
Can you build an attached or detached granny flat in the backyard of an investment property and turn it into a duel income rental property?0- Good morning!
We have spoken to Geelong Council, and they have advised that as long as there is no restriction on title and the land is within a residential zoning, all we would need to do is apply for a planning permit (DA) followed by a building permit.
Please fee free to visit How-Nano Homes website! We would be happy to chat further to discuss your specific needs.0 - Hi Anonymous, we are in a similar situation and have been looking at a company in Melbourne that does a mobile version - a Tiny House. Multiple bedrooms, in a loft, student friendly version, lots of variations available. We believe there are no planning or permit restrictions and if we wish to change our strategy, we can on-sell or simply move the dwelling. Still in the early stages for us, lots of unanswered questions but this mobile version appears the best of everything we have looked at.0
- I live in Brisbane.
Is it legal to rent granny flat out separately? I believe the Brisbane City Council's view on granny flat is that the people living in the granny flat have to be related to those in the main house. In other words, you cannot rent out the granny flat separately.
Please advise. Thanks.0- Hi Rong
Thank you for your question. According to the BCC fact sheet:
Do I need Council approval to build a granny flat?
An extension to an existing dwelling house in a residential zone for a granny flat is referred to in the City Plan as a secondary dwelling. It can be a maximum of 80 square metres in size. If the granny flat is for a member of your household, you do not need to apply for Council approval as long as you meet the criteria in the Dwelling house code or Dwelling house (small lot) code.
Small lots are less than 450 square metres or for a rear lot less than 600 square metres excluding the access way.
You will need to lodge a development application if:
• the granny flat is bigger than 80 square metres in size
• it is more than 20 metres from the main house.
You will need a development application for a different use, a ‘dual occupancy’, if you are renting it to someone who does not form part of your household.
How is a household defined in Brisbane City Plan 2014?
A ‘household’ is defined as an individual or a group of two or more related or unrelated people who reside in the dwelling, with the common intention to live together on a long-term basis and who make common provision for food or other essentials for living.
A household can be:
• one person maintaining a household
• two or more people related by blood, marriage or adoption
• up to five children under the age of 18 that are not related and one or two adults who have care of them
• no more than five people that are not related.
Please visit the How-Nano Homes website! We would be more than happy to chat further to discuss your particular needs...0
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