Blacktown granny flats, are the returns worth it?
A secondary dwelling, or granny flat, is a great use of extra space in your home. Many Australians are creating granny flats for elderly parents, or for teenagers to gain some independence. It’s easy to see why, as we age, having family close by if we need a little help gives everyone peace of mind, and by using space at our homes, it’s a convenient way of achieving it.
But granny flats are not just for keeping families close. More and more Australians are taking advantage of extra space not for family, but to create a secondary dwelling that can return an income. We are all aware of the problems the housing market suffers from, with affordable rental, particularly in areas such as Blacktown, difficult to find.
A granny flat opens the opportunity to appeal to the market who aren’t looking for a high maintenance rental property, and trust us, there is a huge market for cost effective housing. However, if you are planning on building a granny flat to rent out, the important question is whether you can make money from it.
If the secondary dwelling is already there, renting it out if you are not using the space is an easy choice. Its already paid for, so management fees and maintenance aside, rent income is profit. If you are building a new granny flat though, is it worth it?
Investment specialists suggest that on an $100,000 investment to build the property, after costs and mortgage payments, a net income of 13 to 15% is possible. That is $13,000 a year after the mortgage has been paid. For most of us, that is a nice extra income and definitely worthwhile.
This is a very conservative figure. We have seen many of our Blacktown clients earn up to $450 a week rental income. The trick here is to design a granny flat to optimize the return. That is where our expertise comes in.
There are some things to consider, firstly you should use a management agent to handle the letting if you have never been a landlord before. It makes everything much simpler and ensures you stay on the right side of the law. Also remember that you need council approval before you start building. If you do decide to build a granny flat, it can often be useful to talk to a specialist builder, as they can guide you through the entire process from design to completion, making sure you comply with legislation and have a property that will maximize your returns.