You’ll have a wealth of options available to you if you’ve got excess space on a patch of land, regardless of whether you know what to do with it right now.
You could landscape it into a pristine garden, build something for the kids, but if you’re really interested in adding value to your property, there’s one option that stands above the rest.
Building a new property can be both costly and time consuming, as you’ll need to apply for numerous permits from local bodies. Building a granny flat, however, couldn’t be easier.
The NSW Planning Department notes that local governments can approve the development and building of a granny flat as quickly as 20 days from receiving the application. By building standards, that’s incredibly fast, as permits can take months to come through.
As with anything, however, knowledge is your best friend. Read on to find out whether you’ll benefit from building a granny flat.
How Much Value do Granny Flats Add?
Good question, and this largely depends on your property, as well as the type of granny flat you’ve constructed. Recent research, however, has shown that granny flats could add 20-30% of their construction cost to your bottom line instantly.
Despite this, you need to ensure you’re using the space to the best of its abilities. The last thing you want is a Granny flat that completely consumes every spec of green space on your land. Your first port of call should be to work out whether internal or external construction works best for your land and go from there. Think about your garage if you have one, too — it could easily be converted into some added ground floor space.
A Real Boost to Your Rental Income
We’ve already discussed the value your granny flat will add to your property (20-30%), but it can bring in money in different ways, too. In fact, one of the biggest benefits you’ll see from owning a granny flat is the rental income it can generate.
For example, if you’ve spent $100,000 on constructing a granny flat on a stretch of land in a popular neighbourhood, you could make upwards of $400 in rental income every week. This is only just below the median rent across Australia, which sits at $430.
Granny flats are considered as a key value adding strategy as they can help you to maximise what you get from your investment portfolio. Before moving forward, however, you should check your local legislation to ensure granny flats are allowed in your area.