Ignore posts by The Whole Truth · View Post · End Ignoring The forum fuckwit goes RRRAAARRRGGHHhhh - But not a fuck was given..................by anyone.
When you get a chance, learn how to spell Kinetoscope.
Reminds me of when pots and pans were generally black and kettles were generally metallic and reflective. Therefore the pot sees its black reflection in the kettle and thinks that the kettle is black.
Reminds me of when pots and pans were generally black and kettles were generally metallic and reflective. Therefore the pot sees its black reflection in the kettle and thinks that the kettle is black.
Investors are better off buying and operating vending machines than building a granny flat, according to Gavin McPherson, the head of property investment firm Oasis Property Group.
He says granny flats are for poorly informed investors in inferior areas and they attract bad tenants.
“The people that peddle this product trade on the lowest rung of investor,” McPherson told Property Observer. “Smart money knows better and doesn’t touch it.”
In NSW regulations only allow granny flats to be built on properties with a 14 metre frontage which McPherson says is only possible in the suburbs which aren’t ideal for investors.
“The stronger inner urban areas (i.e. the eastern suburbs, the north shore and inner west) thrive because it doesn’t allow this.”
“The bi product also of this is YES it does breed a very low class tenant.
“Cash flow is fine, but if you really are searching that hard for cash-flow – work an extra two to four hours a week (without the granny flat investment that does nothing for your capital value of land) or buy coke vending machines.”
But Jo Chivers, director of development firm Property Bloom, says it can add value to a home or investment 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.” she wrote in July.
“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.”
She says small secondary dwellings are an attractive option for singles and couples – one of the fastest growing sectors of the population.
For someone single or a couple with no kids, living in a purpose built (lavish) granny flat while renting out the main residence could offer a solution?
APF - a place where serious people don't take themselves too seriously. There's nothing else like it.
We own a five acre block near Darwin with a four-bedroom house under renovation.
My hubby is a 65 year-old self-employed tradesman and as we are not overly endowed with super, had the idea that if he built a small residence (granny flat) on same block with separate power, water etc, we could base ourselves there and rent out the main dwelling for income.
We would also caretake the block, e.g. mow lawns, remove palm frond,s etc. (There are a lot of properties this size in this area which build granny flats /dependant units and rent those out seemingly with no trouble planning-wise it seems.) We can’t subdivide five acres here.
Can you please advise if our idea is even feasible tax wise before we look into it further? I realise it is a pretty broad query!
Many thanks,
Jane
Dear Jane,
This is an interesting question and one which is not often asked, and so I referred to Julia Hartman, a great expert on these more obscure scenarios.
She has said that there are many things to consider, the main one being the capital gains tax exemption for your principal place of residence. Once the granny flat is built, if you moved into it immediately, then from a tax point of view this would be treated as two separate properties. Once you rent out the former family home, the cost base of that property is considered to be the market value at the time. The granny flat and the land underneath it would also be given a market value.
At this point you would have to choose which one you wanted covered by the main residence capital gains tax (CGT) exemption – and ahead of time it can be really hard to work out which of the two is likely to have the greatest amount of growth. If you choose the former family home to have the exemption, then the granny flat and its land will have CGT from its determined market value, and if you choose the granny flat, then the family home will attract CGT from the market value established upon you moving out.
If you don’t want the property to be treated like two separate assets, then you need to live in both the granny flat and the house, combined as your home, for the first three months at least. This way, the two houses are seen as one dwelling, and for CGT purposes the treatment would be just the same as if you were renting out rooms or part of your home. This of course exposes the whole property to CGT from the market value of the whole property at the time the granny flat is built, but only for the portion of the home which was rented out – and so it’s done on a pro rata basis.
As you can see – its complex! It’s going to be really hard to actually work out which pathway is the best one to take, since you can’t really estimate future values. Make sure that you have an accountant who can help you work out some ballpark figures and don’t make any decisions until you have a clear understanding of what could potentially happen in the future.
Legislative changes, house price and rental demand increases, in conjunction with a housing affordability crisis, have apparently prompted the creation of Granny Flat Finder, a tech start-up that is filling the niche of granny flat developments.
Ever since the changes in New South Wales allowed investors to achieve dual income by building a granny flat on applicable blocks, there has been substantial interest in the strategy. Most recently, ACT has updated their legislation, allowing granny flats to be larger and more appropriate as rentals.
Since trading in December 2013, Granny Flat Finder, a marketplace for investors to locate builders and designs, has listed over 50 builders covering 15% of the market, and is receiving 1,200 views per day.
Director of Granny Flat Finder Pty Ltd, Jay Wright, built the site to task all the hassle out of options and the complicated laws and processes.
“[Our] research had suggested this was a growing market, however the demand has been unprecedented. This week alone we have had over 100 enquiries submitted to builders through the website from customers looking to have a granny flat built,” said Wright.
Designs can be filtered in terms of one, two and three bedroom designs, and builders have online profiles in a classified-style collection.
The website also provides white papers, guides, tips and legislation.
The January report of the site saw 3,000 views on Granny Flat Finder, 16,000 views of designs and builder profiles and 217 customers enquiring.
Who has not, at some time or other, longed for a granny flat or studio at the bottom of the garden? Especially whenever the in-laws announce a visit, a teenager's music makes the home foundations vibrate or you're simply not seeing eye to eye with a loved one.
But does the prospect of a ready refuge make sound financial sense?
"It can do – but only as long as it's legal!" says Ron Gedeon, principal of RPG Valuers. "If it has all the compliance paperwork, then it can add value. Often it'll add a premium of 20 to 30 per cent of what it cost."
Most of that value will be in the convenience of having a self-contained studio to put visitors, members of the family, a home office, the au pair, carers for an elderly home-owner or paying tenants to earn some extra income. Depending on the location, a decent granny flat can be rented out for between $200 and $600 a week.
"That can be quite an attractive return on the investment," says buyers' agent Jacque Parker of House Search Australia. "In some areas, their popularity has really taken off, and they can add value to a property as people like the idea of a second income."
The NSW government's Department of Planning and Environment introduced new regulations in 2009 to make assessing granny flats easier, and quicker, within 10 days (see panel). That's had a significant effect with an almost 20 per cent increase in approvals – from 2411 in 2011/12 to 2867 in 2012/13.
The figure this year is likely to be higher still. In the past two years alone, builders Master Granny Flats have found their orders have more than doubled. The cost varies from an average $100,000 to build a freestanding unit, depending on finishes, to $110,000 – $115,000 to construct either two-storey flats or units on top of garages, which can involve more engineering work, particularly if existing blocks contain asbestos.
"People are becoming a lot more confident now about adding them on to their properties, particularly when they see them popping up in the neighbourhood," says company director Robert Daoud.
Selling agents Raine & Horne have found properties can sell for a significant premium with a granny flat attached. A four-bedroom house on Dorothy Street, Cromer, for instance, sold in September for $1.25 million, when the median price for the area was $995,000. Similarly, a five-bedroom house on Darley Street, Sans Souci, sold in August for $2.2 million, against the median of $1.08 million.
"As long as it's in keeping with the existing property, doesn't look as if it's been whacked on and doesn't encroach too much on a garden, it can add value," says Raine & Horne chief executive Angus Raine. "That's particularly in an area with a lot of students who might want to rent it, or where a number of generations live under the one roof, or people work from home. When it comes time to sell, it can stand out from the competition."
But if the main house is under par, then better to spend spare cash on that, rather than on a granny flat, says Gedeon. "If it needs a new kitchen or bathroom, you're far better off putting the money in that."
Also, a granny flat can actually devalue a property. "That's if it reduces the outdoor space too much or overlooks the main house," says Dennis Kalofonos of Sydney Property Finders.
"We had one buyer five years ago who bought a house with a granny flat – then tore it down to build a pool."
HOW TO HAVE YOUR OWN GRANNY FLAT
There are four main ways to build a permitted granny flat.
1. Secondary Dwelling Internal Conversion: You can convert an unused bedroom (apart from in the basement) in your home into a granny flat, under the ten-day approval process from the State Government. The only external change should be the new entrance to the flat. Heritage homes are exempt.
2. Secondary Dwelling Over Garage: You can build an extension to the garage, as a new ground-level or second-storey addition to an existing garage. For the ten-day approval, it must comply with height, site coverage, floor area and boundary setback standards.
3. Secondary Dwelling Rear Yard Addition: This is a stand-alone building in the back or side yard of your property. It must also meet certain standards to gain the ten-day approval.
4. A Development Application to Your Local Council: Regulations vary between different councils, and these will be considered on a case-by-case basis.
Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.
Forum Rules:
The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.
Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.
Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.
This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.
Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ
Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy