The most affordable option is a one-bedroom granny flat, and it is a great way to add some comfortable living space to your property. A great way to utilise unused space in your backyard is to build a granny flat as it can be a steady stream of income if you ever decide to rent it out.
Many households can easily set up granny flats in their backyards because are easy to build and maintain. They can be considered as secondary dwellings because they are built in the same space of the main residence.
The minimum size is 36m² for one-bedroom granny flat and usually, a one-bedroom granny flat should cost anywhere between $120,000 – $140,000 which includes site costs, design, and approvals, build price and standard inclusions.
Granny flats are usually detached from the main residence but can also be constructed as an extension of the house. In general, granny flats are self-contained dwellings with their own separate entrances and living spaces. The most important thing for a structure to be considered a granny flat is for it to have its own pathways and entrances.
Purchasing or building a granny flat is usually more cost-effective than buying a standalone investment property which mean that you can get your investment portfolio off the ground without taking out a large loan. Renting your granny flat is the perfect way to get a nice increase on your annual income.
It is important to mention that in order to build a granny flat, this should be constructed on a property zoned for residential use.
Housing prices across Australia’s cities continue to rise which means that it is becoming harder to hunt down affordable, low-maintenance rental accommodation in popular spots. That makes a granny flat the ideal solution for many tenants.
If you decide to build a granny flat, you must consult your local council first to find out specific regulations that apply in your area.
In New South Wales, you must get an approval from a certified accreditor before constructing a granny flat, otherwise you might find yourself at risk of getting a fine. The state allows granny flat owners to rent out the dwelling to unrelated parties. On the other hand, it is hard to get approval for a granny flat in Victoria, especially if you are planning to rent it out. In some areas, renting it out for income is not allowed. This means that you can build a granny flat but only a “dependent” person is allowed to live in the dwelling, and they might let you use the granny flat as a home office, a personal studio, or an extra living room. The same goes for those who are planning to build a granny flat in Queensland.
You would not have any problems building and renting out a granny flat in Western Australia, Northern Territory, Tasmania, or in Australian Capital Territory. These states allow homeowners to use granny flats as a source of income.
There are methods to keep your money in the family, getting a granny flat allows you to do exactly that. You keep your money in the family instead of giving it to a retirement home. When getting a granny flat on your property, you relatives can have privacy and autonomy.
Some of the ways people make use for one-bedroom granny flats are: As a retirement place for someone who wants to downsize and save up, as an Airbnb retreat or as a guest house, some parents get the granny flat for their kids, some are just people who want to downsize because they travel most of the time, also sometimes families get a one-bedroom granny flat because they have kids with disability who require support at home but they need a living space for their own to get some autonomy, families looking to care for their parents who are getting older but want to avoid Aged Care.
It is good to mention that there are ways to maximise your granny flat returns. For this, you need to consider the demand for rental properties in your neighbourhood, the cost of installing a granny flat before making your final decision, keep in mind council regulations as well. When needing a loan, talk about all your options with a mortgage broker and increase or refinance your existing loan. Also, to add value to your property, make sure your granny flat compliments the aesthetic of your existing home without taking up too much yard space.