Even the modest granny flat is frequently seen as a method for expanding an existing home’s living space. The growing popularity of granny flats lends credence to this viewpoint.
It’s conceivable that your elderly parents are searching for a place to live near to the grandkids, or you may have an adolescent child who is irritable and needs more space (while still enjoying the advantages of being at home). One or both of these situations can play a role in your family’s house hunt.
You and your family may benefit financially from the monthly rental income received from a granny flat that is also used as an investment property. They are simple to construct or purchase, need little upkeep, and might provide a reliable source of income.
Read on to find out more about a granny flat’s potential as an investment and its advantages and disadvantages. Purchasing or constructing a granny flat to use as an investment property has several hazards. Among these dangers are the following:
Reasons To Construct A Granny Flat
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Additional Rental Revenue
The main benefit of having a granny apartment on your property is this: The days of using them to store your adolescent or a table tennis table are long gone. In major cities, a granny flat may bring in up to $400 a week, making it a potentially stable source of income.
Your increased income might speed up the mortgage payoff process and move you closer to becoming financially independent. This is true whether you rent out a room in your house to supplement your income or a granny flat on an investment property to earn a second source of income. Examine the many dual occupancy builders we provide and select the most suitable one for your needs.
Distributing the risk of your income
In Australia, most people only have one source of income, which is the money they receive from their jobs. They find it challenging to invest in other possibilities or save money as a result. You might be able to provide your family with an extra source of income by renting out the granny flat on your property.
Renting out your granny flat, if you have only one investment property, will guarantee that you never go longer than a few weeks without receiving rental income. This is quite crucial.
If you are the only owner of a single rental property and it is now unoccupied, you are losing money every week since you are not receiving rent from it. Conversely, it is improbable that both homes would remain unoccupied simultaneously for the same length of time, given the presence of a granny flat.
Increasing your property’s worth
The value of a house increases in direct proportion to the addition of a granny flat. Within a family, one of their elder children or grandchildren could utilize it as an extra bedroom.
If someone is an investor, they will consider the prospect that the property may provide additional revenue, and if it does, they will be prepared to spend a higher price to purchase it.
Speak with a local real estate agent to get an idea of the exact increase in value that it might mean for your house. This will enable you to decide with confidence whether or not to invest.
You can deduct more taxes
If you construct a granny flat on your property and rent it out, you will have additional claims against the value of your home during the period that it is being written down. When you start from scratch, you will be able to deduct a significant amount of paper losses, which will lower the total amount of taxes you have to pay each year.
Getting the Most Out of Your Granny Flat Investment
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Adding a detached auxiliary housing unit, sometimes referred to as a “granny flat,” to your existing house and managing it as an investment is a wise decision that won’t break the bank and will increase your home’s value as well as your income. To ensure that you finish it successfully, please adhere to the instructions listed below.
Be aware of the rules in your area
There may be significant differences in the legal system regarding granny flats in different jurisdictions. For example, in Victoria, building a granny flat on your property is prohibited unless the person living there is considered to be dependent on you. You usually have to take that person out of the house and remove the granny flat from the property as well.
You must confirm the criteria with the state government or your local council before beginning any building project. This will guarantee that you are free to build and that you are aware of any restrictions that could be placed on you if you decide to do so.
Select the best builder for the job
The main thing that will determine whether or not the granny flat is a profitable investment is your choice about its use. Select a companion with the following abilities:
Is reliable, punctual, and sincere in all of their dealings.
The construction competence of the organization is in granny flat construction.
Carries the necessary insurance.
It provides the designer with a multitude of alternatives to select from while creating the design.
Employ providers with a Proven Track Record and a Well-Known Name in the Sector who hold a valid builder’s license.
It is also a good idea to ask to visit one of their completed projects to take a tour and observe firsthand the high caliber of work they provide. You may achieve this by contacting them to arrange a visit.
Recognize the expenses
Before choosing a supplier and starting construction, make sure you have received at least three pricing quotes from reliable local firms. You must have a clear idea of how much any additional work will cost and that you request an estimate from each service provider that covers everything (such as connecting utilities like electricity and plumbing).
Once you have gathered all of these figures, the next stage is to determine whether you can afford the building without placing undue financial strain on yourself. Then, you should pick which function is most essential to you.
Give liveability a priority
Making your granny flat a desirable place to rent an apartment is essential if you want to turn it into a profitable venture and a profitable investment.
In order to transform your granny flat into a profitable property that you can sell, you need to make sure that it is the kind of place where people will want to rent apartments. This implies that it should have a private or semi-private entrance, enough natural light, and an aesthetically pleasing yet useful design.
Installing features like a split system heating system, a small deck, or high-end fixtures might increase your costs, but it can also allow you to charge a higher rent and boost the property’s worth.
Conclusion
Granny flats are now seeing a stratospheric surge in popularity. With a new granny flat, you might be able to increase your monthly income and accelerate mortgage payback if you do your homework and pick the proper builder. But this will only be true if you do the required actions.
If you have the space and the location, adding a granny apartment to your home might prove to be a profitable investment. When choosing whether or not this is the best investment option for you to pursue, make sure you have studied the many options available to you and have a better understanding of the risks associated with each one.
