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Build behind existing dwelling without subdividing?

Discussion in 'Development' started by SirDingo, 25th Apr, 2016.

  1. SirDingo

    SirDingo Well-Known Member

    Joined:
    12th Mar, 2016
    Posts:
    87
    Location:
    SA
    We're considering building another small house on the same block behind an existing IP.

    Clearly having both IPs on separate titles has advantages when it comes time to sell, but are there other advantages, tax wise or otherwise?

    What would be the disadvantages if council approval was sought for a second dwelling without subdividing the block?

    Cheers,
    SD
     
  2. Xenia

    Xenia Adelaide Property Manager Business Member

    Joined:
    21st Jun, 2015
    Posts:
    2,347
    Location:
    4/136 The Parade Norwood, South Australia
    Hi SD
    You may be able to get away with calling it a granny flat.
    It will then fall under council regulation of what a granny flat was. We did this with one of our rentals in Bedford Park Adelaide and the requirements were that it needs to classify as a granny flat, it needs to depend on the main house and either have it's own bathroom or kitchen but not both.

    Obviously you would opt to put a bathroom and get it through council. You can then rent it out and include a conventional benchtop oven and cooktop which are not built in.

    I think there are size restrictions on the dwelling too but check with council requirements in the area. Ours was built as 2 bedrooms.

    Having 2 IPs on separate titles has more advantages rather than a higher price when selling, if it is subdivided, you get a completely seperate dwelling with it's own kitchen, bathroom, water supply etc. EQUITY and as a result increased borrowing power for your next one, would be the biggest advantage. It's active investing - adding value actively to your investments.
     
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  3. SirDingo

    SirDingo Well-Known Member

    Joined:
    12th Mar, 2016
    Posts:
    87
    Location:
    SA
    That's great info, thanks for the insight Xenia :)
     
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  4. MTR

    MTR Well-Known Member Premium Member

    Joined:
    19th Jun, 2015
    Posts:
    7,454
    Location:
    Perth, Melbourne, USA
    Good advice Xenia:)

    I would much prefer separate titles of course as you can sell individually and there are many other advantages.

    Also, seems investors think that building a g/flat will give provide additional income, problem is they do not research all aspects.

    It is important to have separate private entries, tenants desire this type of set up (own private space), otherwise it will be harder to rent.

    Also need to target a market where g/flats are desirable to renters, this is not the case in every area/State, research is required, otherwise the g/flat will take much longer to rent out and you will need to reduce rent.

    I am coming from experience



    MTR:)
     
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  5. beachgurl

    beachgurl Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    455
    Location:
    Sydney
    It depends on where you are building. In Brisbane CC it can be difficult to get approval for a second house before a subdivision is complete. A house I wanted to build was compliant under the small lot code but the small lot code did not apply until the two lots were separately titled.