Welcome to my blog. My name is Deborah. About 15 years ago, I bought an old home. We worked with several contractors to rehabilitate it, but ultimately, the foundation simply wasn't stable enough, and we had to tear it down. After that, we worked with a construction crew to build a home from the ground up. The experience was exciting and challenging, and I learned a lot through that process. I want to share construction and contracting facts and information with others so I decided to start this blog. I hope that you like the results, and I thank you for reading. Enjoy!
When people think of building a granny flat, it's usually to enable them to have elderly relatives living close by. However, building a flat before granny needs it is now becoming a popular investment choice. In New South Wales alone, 4,818 new flats were built in 2014. These self-contained additions to the family home can be used for a variety of purposes. Here are 4 reasons why you might want to build granny flats.
A Boost to Your Income
Building a granny flat is a significant expense; the average cost of a freestanding property is $100,000. It is, however, an investment with a healthy return if you're going to rent the property out. The average rental cost across the country is between $192.50 and $371.25 per week. This means the property could potentially pay for itself in 5 years. This could be an ideal option for people looking to retire early and couples who want to take time out to raise a family in the future.
If you're not keen to share your outdoor living area with a permanent resident, there's another option. If your home is in a vibrant city or a tourist area, you could use your granny flat as a holiday rental property. You get more privacy as you're only sharing your garden for part of the year. Plus, you can charge a lot more. Of course, you'll have to do more work as you'll need to get it ready for every new holidaymaker. But, you have the potential for making more money by adding extras such as meals and services.
Benefits from Tax Breaks
When you build a granny flat that you rent out, you benefit from a great tax break -- depreciation on building allowance and plant and equipment (things like furnishings and white goods). You'll be able to offset costs relating to these areas against your assessable income. You will also be able to claim for some of the areas you'll share with your tenants such as a swimming pool, patio, and barbecue area.
Increase Value and Desirability
There's no guarantee that a granny flat will increase your property value to match the cost of construction. However, if you're planning to stay in your home for some years, you may find renting the property out will eventually lead to the flat earning more than it cost to build. At this point, any gain to the value of your property is a bonus.
While the increase in value may not be substantial, a flat will certainly make your property more appealing when you want to sell it. You will be selling a house with a space that has multiple uses and can generate money.
Extra Space for the Family
You may initially rent your granny flat out, but down the line, you can change your mind. When the property has paid for itself, you can start to benefit personally from the extra space. While it may be too early for your parents to need a flat, they might want to be closer to their grandchildren now, while they're young enough to help out. They may even be willing to sell their home to fund an apartment in your garden.
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