With the possibility of adding significant value to your property, the space in our backyards has become an appealing investment opportunity.
An increasing number of Australians are now opting to convert their backyard into an affordable and stylish granny flat and it’s easy to see why. Not only could it provide extra living space, an onsite office or rental income it can also increase the value of your property and could pay for itself in as little as 5 – 7years.
What’s driving the trend?
NSW Government statistics show that more than 100 granny flats are being built each week in Sydney alone – that’s three times the rate of construction compared to five years’ ago.
According to Farah Georges, Director of Design Cubicle who has overseen the development of numerous granny flats in the past year, societal changes have led to the spike in the trend.
A culmination of factors such as an ageing population in need of care, newlyweds unable to tap into the housing market and young adults who aren’t ready to leave the nest yet are all driving the demand for these second dwellings.
“A granny flat is a very cheap means to provide an opportunity to maintain the lifestyle of all walks of life,” he says. “And may help pay off mortgages, or assist households in relieving financial pressures due to a secondary income,”.
The rise has also been fueled by State legislative changes in NSW, WA, NT and TAS which are designed to encourage a greater supply of affordable housing and allow homeowners to generate income through the rental of secondary dwellings.
At an average cost of just $100,000 this could be a viable option for many homeowners wanting to invest in a second property and there are also possible tax benefits such as being able to claim back depreciation as an expense.
Taking the first steps
Before you get to laying down foundations, erecting walls, or renovating existing spaces, there is a regulatory process with laws that vary from state to state.
Start by calling your local council and requesting the appropriate information on matters relating to the land, including any restrictions you need to consider.
Know your checks and balances
Once you’ve obtained the necessary approvals, you should consider the usage and what you want to get from it now and in the future. Not only will this influence the design but also the return over time.
For instance, there’s one title for the entire residence so you can’t divide your property up if you want to sell in future. Likewise, if you turn it in to a rental you can earn extra cash but need to consider access, privacy and how the utilities will be split.
If you own your own home and are interested in creating or converting a granny flat, check these articles out: