The number of granny flats being built across the nation at the moment is higher than it has ever been before and given the range of benefits they offer, this comes as no surprise. There are many reasons why people will look to build this kind of dwelling on their own land. This article will explore exactly what a granny flat is, and whether or not it can benefit a property by increasing its value.
What Exactly Is a Granny Flat?
Small granny flats have been popular for a number of years now. They are self-contained homes which are built on the property but kept separate from the main house. Some look to construct these abodes above garages, in backyards and on top of gardens. Despite the name, these properties are not just for the elderly and anyone can live in such a property.
Are Granny Flats a Worthwhile Investment?
Building a granny flat is most certainly a good investment and that is down to a number of factors. Firstly there is potential rental income for these properties, which is excellent for cash flow. However it should be noted that when it comes to granny flats Victoria is the only state with restrictions on rentals of these abodes. Rental income is positive both for the property owner and for any potential buyer of the property. Additionally these kinds of buildings can be relatively cheap in relation to other stand alone properties and are much easier to build. .
How Much Do Granny Flats Cost to Build?
Naturally the cost of granny flat investment will range based on what kind of place you are looking to build, and how customised it may be. On average however small granny flats will come at a cost of around $100,000.
How Are Granny Flats Valued?
When it comes to getting a valuation on your property, granny flats are considered as an additional bedroom and are valued as such. Whilst this may be a slightly lower valuation than what it could be if treated as a separate living area there is still a lot of return which can be made on the investment.
The only tax implications which you will have here is to pay tax on the money made from renting out your granny flat. Beyond this you will likely have to pay capital gains tax once you sell the property, although some exemptions may be available.
So, Will You See a Return On Your Investment ?
There is no doubt that with a granny flat on your property you will be able to see a strong return on the initial outlay. Prior to selling you can of course make money on the property through rentals, and you will certainly make the overall property more attractive to buyers.
Ultimately a granny flat is a smart investment. Whether you are looking to add a living space to the property, add value to your home or simply make the property more attractive to potential buyers.