Will a Granny Flat Help You Sell for More?
Are you sitting on a gold mine in your backyard?
What the Experts Say
Did you realise you could have a potential gold mine in your backyard?
If you have a property with a relatively roomy section, there are a number of ways to strengthen its value. An increasingly popular approach is to add a secondary dwelling, otherwise known as a granny flat.
Research from BMT Tax Depreciation suggests that during the last two financial years, the construction of granny flats in Australia has increased 9.3 per cent. Western Sydney led the way with a buoyant 24.1 per cent leap forward.
This substantial increase can largely be put down to the high demand for rental properties in Australia's capital cities (especially Sydney and Melbourne). In 2009, the NSW government relaxed the constraints on second dwellings in an effort to increase the options for renters and make it more affordable.
How Much Value can a Granny Flat Add to a Property?
Having two potential sources of income from one property makes an appealing package for investors. Not only that, but a secondary dwelling can be used, among other things, as a dedicated home office, a place for relatives and friends to stay or a home for your older kids to move into while you keep an eye on them.
The total value that a granny flat will add to a property depends on the location. However, Principal of RPG Valuers Ron Gedeon suggested in a recent Domain article that they can add phenomenal value, often between 20 and 30 per cent of what the home originally cost.
Unique Selling Point
Incorporating a granny flat on your property is essentially like adding another bedroom, which can often have a significant effect on the price. The benefit of an extra bedroom is clearly no secret, as according to the Housing Industry Association, the value of renovations during 2014 was $29.66 billion - that's 2 per cent of GDP!
Thus, in all advertising for your real estate you should make it clear that your home has a granny flat as it can be a real point of difference.
Rules and Regulations
Before you start making plans, here are a few things to consider - BMT Tax Depreciation asserts these are relevant across most local councils.
- Granny flats may not be suitable for rental income in QLD, VIC or SA
- Your section must be at least 450m²
- The maximum size is generally between 60 - 80m² (decks, garages or carports don't add to the total)
Above all, you should check with your local council to confirm the standards in your area.