Turning the traditional granny flat into gold

April 24, 2015
Ali Batten

Do you have a granny flat attached to your home or in your backyard? Perhaps you are considering building one?

Over the last few years, granny flats have become increasingly popular with savvy home owners and investors.
With property prices and rents rising in many of the major capital cities, many Australians are struggling to find affordable and comfortable accommodation.
In Sydney, prices surged 3% in March alone – taking dwelling value growth for the capital city to 13.9% over the last 12 months. At the same time, rents have risen by 2.1% to $490 over the last 12 months.
As such, it isn’t surprising to see a greater number of Sydney-siders calling out for cheaper, ideally located accommodation.

Enter granny flats.
Over the last few years, there has been a jump in the number of home owners and investors erecting granny flats in their backyards.
Savvy homeowners realise that granny flats are no longer just for grannies. In fact, they are a great way to build a tidy supplementary income.
Better yet, with so many granny flat styles and designs on the market, a granny flat no longer has to be a makeshift rumpus room attached to the house.

Today, they can be entire homes on the same block of land as the primary home. These secondary homes then have the potential to generate the owner significant income. Of course, if you are thinking about building a granny flat for investment purposes, there are some key things to consider first, including:

• Legal and financial requirements:
It is important for those considering erecting a granny flat on their property to first check the relevant requirements. Regulations regarding construction and occupancy vary from state to state and council to council, so it pays to do your due diligence and make sure you are working within the right parameters.
• Financing:
Some lenders will restrict the loan size for a property that is set to be built on land that already boasts another dwelling. That said, there are still plenty of financing options available, so make sure you speak to your local Mortgage Choice mortgage broker.
• Services:
Before erecting a granny flat in your backyard, it is important to know exactly how you plan to connect the storm water, sewer, water and electricity to the dwelling. Often connecting the various services to a granny flat is the most complicated and expensive part of the entire process, so make sure you know what you are getting yourself in for before leaping in feet first.
Granny flats are not only an excellent way to supplement your income, but also provide a huge amount of other opportunities. Whether you’re looking to move the kids into a teenagers retreat, build yourself a home office, bringing your elderly family a little closer or simply making some extra money with rent – a well-planned granny flat could be a good decision.

Contact either Owun, Suzanne or Costa on 02 9517 1818 or newtown1@mortgagechoice.com.au to discuss your options. Or, if you feel like dropping in at our office, we are located at Suite 106, Flourmill Studios, 3 Gladstone Street, Newtown 2042. Be sure to share our blog on Facebook and Twitter and let others join the conversation!

Posted in: Tips

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