Backyard cricket pitch not getting much of a workout these days? Sick 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% to 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 would require an initial investment of up to $200,000, while the outlay for a one bedroom dwelling would be approximately $120,000. The full report is here.
The 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.
How to assess your property’s granny flat potential
Got a big backyard and want to see what you can do with it?
Granny flats can’t be built just anywhere. The property must have 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.
As it happens, Archistar has developed a platform that can help you view in 3D the potential to add a granny flat on your property.
“Archistar’s platform helps home-owners by instantly assessing thousands of zoning and planning laws and producing a report, so it’s worth taking this step and consulting a local planning expert before you proceed,” says Coorey.
Last but not least – finance!
If you’re interested in ripping up the backyard cricket pitch and adding a granny flat to your property, feel free to get in touch.
As discussed, granny flats require an initial investment of $120,000 to $200,000. So if you’d like to run through your financing options, you know where to find us!
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Author: Pat Casey – Managing Director & Financial Planner Sydney – Assure Wealth
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