The latest census results show that there’s been a spike in demand for homes that have a second dwelling, or have the potential to be adapted to evolving households’ needs. I have also witnessed this trend in our local market place.
Buyers are looking for the flexibility of having separate self-contained accommodation for an elderly parent, adult children, running a home business, or renting out the extra space for additional income.
Additionally, residential spaces are harder to find and are more expensive, and property owners looking for creative ways to more easily afford properties and maximise their income – granny flats are the obvious choice! A granny flat is often self-contained with kitchen, bathroom and a living area (usually under 60 square metres).
Throughout Sydney, building approvals for granny flats have almost tripled on a yearly basis since 2010. House and land packages also now offer many options catering for these buyers, with packages that include separate self-contained accommodation.
If you are looking to purchase a property that already has a granny flat, your first priority should be finding out if the dwelling is legal, with all appropriate compliance paperwork in place.
So what are the benefits and risks of attaining a property with a granny flat?
Accommodating family members
If you live in a property with a granny flat, you have flexible options for the changing needs of your family. For instance, as your parents get older, you have the option to have them living with you, or the ability to add a home office.
Extra rental income
Granny flats can be handy income earners.
Spreading your risk
If you have an investment property with a main residence and granny flat, you have the added protection of receiving rental income from one property, while seeking a tenant for the other. The likelihood of two vacancies at the same time is highly unlikely, minimising your risk.
More tax depreciation
If you are thinking about adding a new granny flat on your land and renting it out, speak to your accountant first on what can be claimed through depreciation.
Increased home value
Adding another dwelling on your property will increase the value of your home (as long as it is done to a good standard).
Increased property management costs
An extra dwelling brings extra responsibilities and maintenance costs.
You may reduce your rental market or resale potential
When it comes renting your residence, the presence of another dwelling on the property may not be attractive to some tenants. And when selling, the presence of a granny flat will appeal to a smaller number of buyers.
For more information, or to discuss any of your real estate needs, please contact our team today on 4628 7444.