Hi. My first post (possibly a little controversial but I don't wanna hear any moral high ground trips on this one)
I feel I have the perfect ingredients to fly under the radar with an unapproved granny flat (or 5)
- Shit chute running through my backyard (all I have to do is lift a square concrete block and I have direct access to the sewer). I plan to rig the g/f's up to this. - Water and power are easy. Rig from hose and house. - Lots of desperation here. Plenty of people on Gumtree begging for a rental (very low vacancy rates).
The area I am in is a lower social demographic area and I feel it wouldn't be too hard to get away with this type of behavior here but am seriously considering taking the extra time out to plant hedges all around the property to make it near impossible to see in.
I want some hints and tips from those that have done it or know a thing or two about doing it. I want it to last long-term and fly under the radar making this venture a great little cash cow for me.
Caravans (due to being able to argue to the council that you were just helping a friend out in dire straights, and the fact they can't make you remove them from your property), or cabins? Which require approval and you can be made to tear them down (+ harder to argue that is was just a temporary thing if cabins)
Advice? Keep your mouth shut, the less people you tell the more chances of getting caught. But now you have gone online and told the world, and the ATO will be pulling their strings with asio to contact the NSA and track you back from your ip and computer ident. I wouldn't want to be in your shoes after they get a hold of ya.
Hi. My first post (possibly a little controversial but I don't wanna hear any moral high ground trips on this one)
I feel I have the perfect ingredients to fly under the radar with an unapproved granny flat (or 5)
- Shit chute running through my backyard (all I have to do is lift a square concrete block and I have direct access to the sewer). I plan to rig the g/f's up to this. - Water and power are easy. Rig from hose and house. - Lots of desperation here. Plenty of people on Gumtree begging for a rental (very low vacancy rates).
The area I am in is a lower social demographic area and I feel it wouldn't be too hard to get away with this type of behavior here but am seriously considering taking the extra time out to plant hedges all around the property to make it near impossible to see in.
I want some hints and tips from those that have done it or know a thing or two about doing it. I want it to last long-term and fly under the radar making this venture a great little cash cow for me.
Caravans (due to being able to argue to the council that you were just helping a friend out in dire straights, and the fact they can't make you remove them from your property), or cabins? Which require approval and you can be made to tear them down (+ harder to argue that is was just a temporary thing if cabins)
Thoughts/tips/advice?
But if you install 5 illegal granny flats, you won't have room for the drug lab or the hydroponic marijuana plantation.
Any expressed market opinion is my own and is not to be taken as financial advice
In 2009 the NSW Government released a new policy that has been well accepted by most property owners, including investors and owner occupiers alike.
The Affordable Rental Housing - State Environmental Planning Policy (SEPP) is encouraging people to build more granny flats and Property Bloom has introduced this as an affordable development strategy that may help you to grow your property portfolio.
If the council allows complying development on the property (check your section 149 planning certificate in the sales contract), then you can fast track the approval process and have a private certifier issues approval within ten days.
As one of the development strategies we offer, Property Bloom finds properties suitable for a complying development.
We’ll then manage all the fine details to create a high yielding investment for our clients.
The policy introduced by the NSW Government is a fabulous strategy as it allows more property owners to add value to their homes or investments in the short and long term.
From a development perspective, it can be a quick and easy way to build your property portfolio and create high rental yields.
Owners can benefit from cash-flow from the rent on two dwellings and also receive good depreciation benefits on the new flat (if being rented). This means people can keep moving forward with their investment strategy.
Unlike buying a single apartment for instance around Sydney which is likely to be negatively geared, adding a granny flat to a property with an existing dwelling can result in a cash-flow positive situation.
In the past granny flats were only permitted in certain residential zones, but this SEPP has opened up a whole new real estate door. The aim of the granny flat is to boost the supply of affordable rentals by providing housing for the elderly so families can support each other, as well as the younger generation who are living at home and are not in a position to move out just yet.
Government projections show us that single-person households are likely to be the fastest growing sector over the next 20 years, so demand is definitely there.
Small secondary dwellings are an attractive option for singles and couples who don't need a lot of room and are the most likely people to be under rental stress.
Young people are also staying at home longer and granny flats can provide extra space for them and be a lifesaver for Baby Boomers who were hoping to empty their nest some time soon.
This policy means that if you have a block over the size of 450sqm you are able to build a granny flat no larger than 60sqm on your existing property, you may get approval in approximately 10 days, as long as it is complying with the council’s regulations.
Property Bloom focuses on developing property, including granny flat developments, in the Hunter Region on NSW due to its affordability and strong, diverse economy.
The area is earmarked for long term growth in the NSW government’s Lower Hunter Regional Strategy. The 25 year plan, provides for 160 000 new residents and 66 000 new jobs.
Local industry includes manufacturing, mining, retail, construction and tourism.
In the Hunter, Property Bloom locates properties priced around $250,000 that may need a small cosmetic renovation.
With the addition of a two bedroom granny flat, which we build for around $105,000; it’s a really affordable investment and a great way to dip your toe into property development. These projects are creating a 7-9% gross rental yield. This type of development suits someone starting out in developing or an investor looking to create a cash flow positive investment.
To take advantage of the NSW Government’s Affordable Rental Housing - State Environmental Planning Policy (SEPP) the regulations include:
Granny flat must be no more than 60sqm in size
Land must be more than 450sqm
Can only be one house and one granny flat on the land
The land cannot be subdivided
It meets the requirements of the Building Code of Australia
Granny flats are becoming more and more popular in Australian backyards with clever investors tapping into an income stream which, in the right circumstances, can offer financial freedom.
When planning a renovation to add value, most Australians will invest in a nice big deck, balconies or a swimming pool. Home owners and investors often overlook the humble granny flat as a means of gaining a real return in the backyard of their primary residence or in their investment property.
The often overlooked granny flat can be a very lucrative option for both rental yield and overall property value for those who own an existing property with the necessary lot size of 450m2.
Laws have changed in NSW, making it easier to gain approval to build a granny flat. Granny flats come under the NSW government affordable housing scheme, meaning many existing regulations that often act as a disincentive to build do not apply. Now minimum rules and planning laws are applicable for granny flats up to 60m2.
There have also been some recent changes to legislation that make the granny flat a more viable investment. Home owners and investors can now lease their granny flats to a non-dependent. Prior to these changes it was only a dependent relative that could occupy this space.
The regulations of granny flats varies from state to state and council to council, but the general regulations dictate that there can only be one flat per house on the property and the living space of the flat cannot exceed 60m2 in NSW, Victoria and WA and 70m2 in Queensland.
There are regulations regarding the height of the flat and distance from the flat to the boundaries of the property; however, these vary and differ so much between councils that you should look into your local council guidelines before making any decisions. Queensland also has regulations for requiring water tanks and only having a certain percentage of the property covered by permanent roofing.
As an example, in many Sydney suburbs this strategy is really starting to take off.
A property which recently added a granny flat in addition to the house was able to achieve a consolidated income of $900 per week.
The standalone house was only able to achieve $500 per week and with the cost to add this secondary dwelling at approximately $100,000, an income of $400 per week for the granny flat represents a return on investment of over 20%.
The granny flat not only poses great benefits as far as rental yield. The value of this asset would have increased due to the yield on the combined property. Now that’s unearthing a gem in your backyard whichever way you look at it.
A 'what if' scenario should always be completed when considering any investment. Speak to the experts to see what rules, regulations apply and your local property manager regarding demand for this type of investment.
Robert Projeski is the founder and managing director of Australian Mortgage Options, winner of over 12 industry awards. He is considered a leading property finance expert in Australia.
Hi. My first post (possibly a little controversial but I don't wanna hear any moral high ground trips on this one)
I feel I have the perfect ingredients to fly under the radar with an unapproved granny flat (or 5)
- Shit chute running through my backyard (all I have to do is lift a square concrete block and I have direct access to the sewer). I plan to rig the g/f's up to this. - Water and power are easy. Rig from hose and house. - Lots of desperation here. Plenty of people on Gumtree begging for a rental (very low vacancy rates).
The area I am in is a lower social demographic area and I feel it wouldn't be too hard to get away with this type of behavior here but am seriously considering taking the extra time out to plant hedges all around the property to make it near impossible to see in.
I want some hints and tips from those that have done it or know a thing or two about doing it. I want it to last long-term and fly under the radar making this venture a great little cash cow for me.
Caravans (due to being able to argue to the council that you were just helping a friend out in dire straights, and the fact they can't make you remove them from your property), or cabins? Which require approval and you can be made to tear them down (+ harder to argue that is was just a temporary thing if cabins)
Thoughts/tips/advice?
no i would not do that, but you could buy a nice caravan and put it down the back of the block. Peter from Perth
Granny-flats have renewed interest given recent law changes in WA, but are they really a good idea for investors?
Here are the top four reasons for and against granny-flats:
For
Increase your property’s rental – adding a granny-flat can add a significant amount of rental income onto an investment property. It means you’ll get two income streams from a single lot.
Turn a negatively geared property into a positively geared property – This extra income can turn a negatively geared property into a positively geared one. It may mean you can stop claiming deductions but at least you’re earning some cash.
Many tenants prefer them to apartments – granny-flats allow tenants access to a back-yard, which means they’re often pet friendly and utilities are often included in the rent due to the complications of separate metering.
Always have an income from the property – If one tenant vacates then you’ll always have the other to see you through the vacant period. It’s not a lot of money but it keeps the cashflow going.
Against
Reduced rent on the main house – Tenants will demand a lower rent on the main house if they are forced to live with other tenants in their back yard.
Longer vacancy periods – Even with a reduced rent there is often a longer wait on finding tenants on a house with a granny-flat. Many people simple won’t do it due to concerns about neighbour disputes and loss of privacy.
It may not add value to the house – granny-flats can cost a lot to build – maybe in the vicinity of $100,000 but they don’t add that much to the house, if at all. Land and houses increase in value, but granny-flats don’t. And they’re not even that special any more in some suburbs, especially across Sydney that have had a surge in granny-flat activity. When it comes to resales granny-flats might reduce your buying interest to investors, with own occupiers taking their interest elsewhere.
They’re ugly – They’re not very pretty things to look at. There’s no getting round the fact that granny-flats detract from the outlook of the property, which could diminish it’s value.
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