When it comes to the present state of Australia’s property market, it’s no secret that the Royal Commission into Banking has resulted in increased lending restrictions and higher mortgage rates for investors.
While experts say a crash is unlikely due to population growth, the media and news headlines are reporting Australia’s property market is slowing down and cooling-off after a strong period of growth.
With these changes, property investors are seeking ways to maximise their rental returns to balance out any negative effects from increased expenses and slower capital growth.
It is not for everyone, but one way some investors are looking to maximise their return is to develop their property (where possible) to achieve a higher return by including a granny flat. It can be custom-built, pre-fabricated, transportable or even flat-pack.
Regulations around planning and development have become more favourable to investors in recent years, which means it is a great time to make improvements to your property – to increase the value, and justify asking a higher rental amount.
Dwellings like granny flats have become a popular value-adding strategy for investors, as they are relatively inexpensive to build, and can be rented out as a separate dwelling or add a premium to the existing property rental.
Other ways to increase value include, extending, adding extra bedrooms, subdividing and building a second dwelling, or turning a single house into a dual key dwelling.
Can anyone build a granny flat on their block?
The simple answer is in most cases generally yes, depending on the lot and granny flat size. However, there are rules and regulations around granny flats that vary from State to State and even council to council, so research is the key for those thinking of building one.
One final important tip, when having multiple different tenants on the same block of land you will want to make sure that the two residences are as separate and private to one another as possible, otherwise it will have a negative impact on the rental value and make it harder to manage, or reduce your tenant market.
IMPORTANT: This is not advice. Clients should not act solely based on the material contained in this post. Items herein are general comments only and do not constitute or convey advice per se. Every effort is made to ensure the contents are accurate at the time of publication. Clients should seek their own independent professional advice before making any decision or taking action. We take no responsibility for any subsequent action that may arise from the use of this information. Originally published by the PPM GROUP – www.ppmgroup.com.au