The real estate bubble in Australia has not burst yet the way that it has in the rest of the world. House prices are continuously increasing and property owners are looking for ways to maximize their income and their profits through investment properties. One way that Australian homeowners add property value to their homes is through the addition of a granny flat. Adding property value with a granny flat is an excellent investment option for investment portfolios.
What is a granny flat?
This is a residence that is either semi-attached or completely detached from a homeowner’s main residence. It is a secondary residence, complete with its own living space, kitchen and bathroom for renters. They are typically located over the garage or on a completely different location on your property.
How do they add value?
They add value to your property by providing the basis for dual-occupancy, which is when two separate families live on the same property in different dwellings. Property value is greatly increased with the addition of a second, albeit much smaller, residence on a property. This is because owners now have the option to rent the granny flat to a tenant and make a profit from the flat as a rental.
Use of a granny flat
Even if you opt to add a granny flat to your property, you are not required to rent it out to someone else. Many Australian residents choose to provide a home for their elderly family members, such as a parent or grandparent, in the granny flat. This gives you the option of caring for your elderly family member without the inconvenience of sharing your home with someone else. Your elderly family member lives on your property but everyone has their own personal home space.
Additionally, some families choose to provide shelter to their college age children by giving them the granny flat to live in while attending university. This option is one that many families prefer because it gives children a chance to live on their own without going too far from home or needing to pay rent. They can focus on their studies while still maintaining their freedom from their parents.
You also have the option of renting the flat to a tenant. This means that your home is now being occupied by someone else, perhaps a stranger or friend or family member that wants a place to rent. To ensure that the renter understands the stipulations, rules and regulations that come with renting your granny flat you need to provide the renter with a rental agreement that you both agree upon before signing. This guarantees you are legally due the amount of the rent stated in the agreement each month and can evict the tenant if the tenant cannot pay the fees associated with living in the granny flat. In addition, your rental agreement should state that the property cannot be damaged in any way.
It is important to ensure that before building, you comply with all regulations and stipulations regarding the size and decor of this property type. The only considerations you need to make are with building controls such as the ratio between the height and floor space. Before you begin construction you must do some research to find out what your entitlements are in relation to the cost of the construction. If you are building an extravagant flat with top of the line appliances and floors, your cost will very likely outweigh the money you will make from renting the flat out. Stick with nice, reliable appliances and accessories that look good and will hold their value without adding too much cost to the project. Once your granny flat meets all of the required laws you are free to begin construction!
Increase your income
These flat types provide a great source of rental income. If you choose to build a one bedroom duplex you won’t receive as much rent as you would with two or more bedrooms and enough size to rent to a family. The more you can rent your granny flat for, the more money you can add to your wallet!
Sara is an independent writer who works for the Home Loan Experts, mortgage brokers that specialise in finding loans for people in difficult situations. They also help people who want to build a
http://www.cheapmortgageloans.com.au/home-loans/home-loans-for-a-duplex/”>granny flat or other a
http://www.homeloanexperts.com.au/property-types/dual-occupancy/”>dual-occupancy dwelling, to get approval for finance.