Build Granny or Have huge backyard

Discussion in 'Investment Strategy' started by Bhb, 10th Oct, 2021.

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  1. Bhb

    Bhb Well-Known Member

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    Hi All,

    I just bought a 50 year old , 754sqm house near seven hills,NSW train station.It currently has a 3 bedroom house with huge backyard which is currently filled with huge garden. My plan is to rent this house. I would like to get your suggestions on: is it worth spending money on building a new granny in the backyard ? I guess granny would fetch additional 300-350 per week rent but cost of building a granny might be around 100000 - 150000.

    Please advise.

    Thank you very much.
     
  2. skater

    skater Well-Known Member

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    Depends what your goal with this house is.
     
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  3. Anthony416

    Anthony416 Well-Known Member

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    Is a Dual Occupancy an option for you? Depends on many factors such as existing house location, age of the dwelling (50 years maybe a KDR option?), min lot size for Dual Occs (if permitted). Generally people are re-thinking the GF option as maybe not the best one. Note: Granny Flats are classed as Secondary Dwellings although people do sometimes call them a Dual Occ this is technically not correct and different rules apply.
     
    Last edited by a moderator: 4th Jul, 2023
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  4. leostarkz

    leostarkz Well-Known Member

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    what was the purchase price?
     
  5. Bhb

    Bhb Well-Known Member

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    981K, Thanks
     
  6. jaydee

    jaydee Well-Known Member

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    Spending $150k to get an extra $300pw represents approximately 10% gross rental return which is pretty good financially speaking.

    However, this also needs to be factored against possible reduced rent from main property as well as a host of other factors.
     
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  7. Lincsus

    Lincsus Well-Known Member

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    If you plan on holding the property for a long time, then granny flat definitely makes sense. The construction of the granny flat will be around 120k plus council fees of about $5000.
     
  8. SouthBoy

    SouthBoy Well-Known Member

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    Granny flat will be a good option if you have a wide street frontage and can fence off the GF from the main residence to give each other privacy. If not you will be comprimising the rental returns on both properties and the resale value of your property down the line.
     
  9. Joseph33

    Joseph33 Well-Known Member

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    Blacktown councils contributions (seven hills is part of this council) are currently 16.5k for a 2 bedroom granny flat. Absolutely crazy. I know this because I’m just about to pay it.
     
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  10. Shawn

    Shawn Well-Known Member

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    Completely agree. @Bhb - I don't think. your property would really suit a granny flat. There isn't a particular easy way to build isolated access to the street for the granny flat residents.. unless you narrow down the driveway - which may not be possible.