Additional monthly/quarterly costs of a GF

Hey Guys and Girls

Can you assist me with extra cost of a Granny flat.
Outside repairs

Sydney Water? I assume so due to additional meter being installed. Do you need additional meter or can you split usage 50% between main house and GF?

Does council charge extra rates?>

Can I simply order additional bins without extra fees. In our area we can order additional recycling bins for both green and recyclables at no extra charge. Although rubbish bin incurs extra costs.

What else am I missing?

Advice on connecting phone lines and so on.

 

I doubt you can legally pass water charges to a tenant unless you can prove their actual usage, so another meter would be necessary.
Marg

 

@Illusivedreams
Extra bins - approx $600 per year - Call up council and ask. There's a way to get it for free, but im not going to state it because i think its wrong.
Extra insurance - Landlord @ $380
Sydney Water - Ask for a 2nd meter (that is readable by Sydney Water - Free - Ask at Reece).
Separate power meter
Separate gas meter
Extra telephone line ($399 for connection)

Serge has got a pretty comprehensive write up on his site.

 

When I looked at the heading "additional cost of GF" I thought you were going to talk about "girl friend " they have additional cost
Granny flats create additional income lol

 

Thank you so much for the information.
I'm getting quotes for GF for my Lurnea property now. As Sydney is not going for CG for a few years I feel GF is best in this environment.
Feel free to add advise tips tricks and personal experience with Granny flats.

 

Ok have 4 companies im seeing and will get quotes on.
Issue is a the 12 m rule and my block is wider front narrow back meaning GF would sit closer to main residence than i would like.

Also not sure with going Brick or cladding. Love the look of brick more solid house like feel. But cost and in so pay back as well as space loss of 5/10% is worrying me.

@neK
All the GF builders are quoting extra for additional water meter? any advice.

Does council charge extra rates for GF>?

 

@Illusivedreams
So are all the builders stating that once the distance between your two side fences hit 12m they won't build past that point? Give Granny Flat Approvals a call and speak with Nick / Serge / Faraj and see what they reckon.

Brick or Cladding - Brick means you lose more internal area - on something as small as 60sqm, you need EVERY piece of sqm you can get your hands on.All of mine have been cladding - frankly they look fine, valuers don't care much, and renters care more about internal than external facade. I built some with Vinyl Cladding and I HATE it the look of it. It looks cheap. So I've now moved onto Scyon Stria (405mm profile) cladding which looks pretty good. Close to a rendered look and solid too. I've never had the feedback of "i don't like that its not brick" from a renter over the last few years.

If i was building a new granny flat in sydney right now, it would be cladding. The appeal of brick is for the owner (ie you). And unless you're planning to sell it, it doesn't add much value.

Also make sure you go as HIGH as you for ceiling - 2.7m is the way to go, even if it means lowering your roof pitch. You walk into a 60sqm granny flat at 2.4m it feels tiny. At 2.7m it is acceptable. Even higher if you do raked ceilings.

As for additional water meter - its free from reece. Just got to pop in there and ask. If you get the builder to do it, they might put in a check meter instead and charge you $300 for it.

That said the builder will charge you more for the "provision" of a water meter as they usually like to tee off from the back of the existing house "cos its easier".

I make them tee off from the meter which means they need to do more trenching and thus extra $$$.



I also make them dig a trench for power, because most will trench between the house and granny and then run the power up into the roof of the existing house. Personally not a fan of that, but each to their own.

 

@neK
Mate great advice It sounds like you have done a few.
The advice about bricks in invaluable. I was 100% set on brick but reading the info online and 6sqm loss i think cladding is the way forward.
Cladding looks great. Do you go horizontal or vertical?

Totally agree with 2.7m ceiling height. Thats definitely locked away. Would raked ceilings add costs> Do you loose some of the insulating portieres?

With AC. I was thinking 1 split system unit in the main lounge area. What are your thoughts?

Thank you so much for your detailed response for a member you dont know. Cheers I appreciate it. I will also aim to contribute and add value after my build.

 

@Illusivedreams no worries!

A/C I have one unit in the main living room that's it.

You'll be surprised how well these things are insulated.
Concrete floor
Walls: Cladding + plywood (for extra strength - cheap as) + insulation + wall
Ceiling: Insulation + Sarking

One of tenants who lived in the granny flat for 3 years (from when it was new) claimed they only turned on the A/C on average 1-2 per year! That's how well insulated the granny flat was!

As for cladding its a personal preference. But here's mine. I feel horizontal works well with long windows. With small windows it makes it look like a toilet block

After painting


Before painting (I actually prefer this lighter colour!)

 

Looks nice! maybe silly question but what is sarking pls

 

It's like a waterproof membrane. Insulating and waterproof properties

 

Thanks

 

Thank you @neK and @The Y-man for sharing your experiences and suggestions. I'm keen on getting a granny flat completed next year for one of my IPs and hopefully complete another one the year after once the fixed period has completed.

I'm sold on the idea of trying to future proof myself and that in a matter of a couple of years be able to completely pay off the loans for the granny flats. I'm also of the view that I don't want to sell any of my current IPs and just want to increase my cash flow to the stage that it's paying my PPOR.

The questions I have is, did you guys build the granny flats while a tenant was in the house? If so, did you experience much resistance and issues? Originally the lease agreement was signed with a tenant that did not indicate a granny flat was being constructed.

 

When I read the title of your post @Illusivedreams , I really thought you were asking people how much of an impact having a girlfriend would have on your monthly cash flow (and, for some high-maintenance girls, I believe it can be a LOT).

 

@jins13
I'm Also curious on the tenant leaving in premises during building.

My settlement is on the 10tb Friday I have interviews my first Granny Flat builder. Granny Flat Approvals.
I have 2 more meetings before I proceed.

I will probably put the Granny Flat into rental that would give us options to build.

Construction period seems to be 12-20 weeks. I guess the only good thing is it's not too long.

What is everyone else's experience on construction time?

 

In my opinion, its not too dissimilar to having your neighbour build next to you. Sure it might be a turn off for some renters, but if done properly, most seem to be fine with it.

I've built a granny flat at the back of an existing house while tenants actually reside there. But mine was a corner block, so slightly less disruptive. I haven't actually built one battle axe style while attempting to rent it out, but I have heard plenty of negative stories.

- Tenant was advised granny flat was going to be built prior to moving in. But then the tenant "forgets" and makes building difficult and starts kicking up a stink.
- Tenants allow build but make it difficult for the builder (builder sometimes needs access to water and power (to charge their batteries).

For me, my tenants were ok, but moved out 1 week before completion - citing that it was dangerous for her kids - they kept running out and playing in the construction zone as most young kids like to do.

Hindsight I would have fenced it off properly - not temporary fence.

2nd time around, I organised for a builder to construct the granny flat. I waited until lockup stage (ie outside is complete - cladded, windows, roof, doors can be locked) before advertising the front house. During that period, I gave the existing house a quick reno - new paint, flooring, toilet etc. I also fenced everything off with a proper fence so it felt segregated.

Tenants are generally a little iffy when construction is mentioned, but if they see the property is already complete and its "just the inside" most are fine - given there was probably 8 weeks of construction left and by the time they moved in, the majority would have been completed.

I rented out the front house with little issues. I also advised them that the builder will be required to use the power from time to time to charge their power tools and I was happy to reimburse them - tenants weren't concerned about it as it was only a little bit of power.

 

Short Version:

1. Get granny flat builder to have all plans approved and be ready to go prior to settlement
2. Renovate existing house while granny flat builder starts on granny flat.
3. Get the granny flat as close to lock up stage
4. Get a proper fence up as soon as possible
5. Advise tenant (just prior to signing lease agreement) that builder may need to borrow power and specify the purpose. Offer to reimburse.
6. Adviser tenant (just prior to signing lease agreement) that builder may need to use water. Offer to reimburse.

 

I had trouble with finding tenants before and during build also. Even in a tight market. No one wanted the interruption or risks to kids. 3 months advertising...no real takers except at a subsidised rate. To difficult, was the theme I took away was that, quite rightly, people just want to relax at home. Not put up with other people's problems.

In the end I renovated main house , significantly ...whilst building the back granny flat. Total loss of rent for build six months./ 9 months total

Definitely segregate with good fencing and gates. As @neK suggests.

Seperate meters for gas, electricity, water and phone.

In the end front renovated house rented for approx 20% more than prior to granny . Within two weeks.

Granny immediately on occupancy certification.

Next time I wouldn't bother with hassle of finding new tenants if they left during build unless on a corner block.

The numbers have to stack up in order to carry no rent for the 26 weeks (worst case) if you are doing a feasibility study.