Are you considering buying a property with a granny flat, or putting a granny flat onto an existing property you own? This is a great solution for a variety of purposes, such as accommodating an elderly parent, adult children, or running a home business. Or you may be looking to gain extra income from the granny flat.
Whatever the reason, the advantages of owning a property with a second dwelling on the same block are many. In Sydney alone, building approvals for granny flats have almost tripled on a yearly basis since 2010.
With residential space becoming rarer, and property owners looking for creative ways to maximise their income, granny flats are the obvious choice. Granny flats can either be attached or unattached to the main residence, but in all cases are smaller. They are often self-contained with bedroom, kitchen, bathroom and living area, and are usually under 60 square metres.
If you are buying a property that already has a granny flat, your first priority should be finding out if the dwelling is legal, with all appropriate compliance paperwork in place.
So, what are the benefits and risks of buying a property with a granny flat?
Accommodating family members
There is no doubt that part of the reason behind the popularity of granny flats is for the accommodation of family members, such as parents or grown-up children.
Extra rental income
Granny flats can be handy income earners.
Spreading your risk
If you have an investment property with main residence and granny flat, you have the added protection with any vacancy of one dwelling being rented while seeking a tenant for the other. The likelihood of two vacancies at the same time is highly unlikely, minimising your risk.
More tax depreciation
If the granny flat is new and is being rented, then there is the opportunity to claim depreciation. You should discuss with a qualified financial professional.
Increased home value
Adding another dwelling onto your property will increase the value of your home (as long as it is done to a professional standard).
Increased property management costs
An extra dwelling brings added responsibilities and maintenance costs.
You may reduce your rental market or resale potential
When it comes renting your residence, the presence of another dwelling on the property may not be attractive to some tenants. And when selling, the presence of two dwellings will increase the value of your property, but will change interested purchasers to either one who is looking for this sort of living arrangement, or an investor.
For more information, or to discuss any of your real estate needs, please contact our team today on 4628 7444.