NSW Buying old house and building a granny for dual income.

Looking for some guidance in buying an existing land and house and building a Granny Flat in Sydney/Blacktown council . This is my first experience with building a granny and I am still researching . Meanwhile I thought of posting it here so that I can get some directions from experienced investors/builders.

1. Currently at the looking stage for properties . Looking for 500 plus land . Most of them have Cladding or weatherboard houses in it. Plan is for me to buy and build a Granny in it for dual income purpose . Any drawbacks with this strategy if you can highlight pls.

2. I see the options of Brick Grabby vs. Weatherboard ( I prefer Brick not sure how much difference it would make in cost - analysing now ) . Also any other options worth considering

3. Any recommendations for Granny Builders ?

4 . I was advised to go with a private certifier rather than council . Would be contacting someone soon for more details.

5. I also want to understand at what stage the duplexes are an option ? ( though that is not my current plan , but given some of these houses are definitely knock down in a few years . Would that be a council question or a private certifier ? ( to understand the eligibility/council approvals/DA approval times/ building costs etc ) )

Thank you very much for your time.

 

We have done this three times now.

Suggest you read the help guides at Granny Flats Sydney | Expert Builders, Approvals & Designs
they and the forum here and Somersoft helped us a lot.

My thoughts on your questions are :

1. Good plan for cashflow, but will chew up more of your capital then other plans. Very important to know how to evaluate the various sites - separation and privacy are key factors. The above guides should help.

2. Build to your market generally brick will not get enough extra rent for the additional cost and hassle. It is the same with most extra features- people rent granny flats mainly for the cheaper rent.

3. Always get three quotes and haggle, we used Blue Gum Granny Flats and was very happy but that was some time ago.

4. We used the Certifier organised by the company that got the approvals done.

5. Generally two different projects and two different sites. If the block can have duplexes then a granny flat would not be a best use of it.

 

What about granny flating upwards? AKA a Fonzi Flat above an existing house where block size doesn't permit an extra footprint.

Sorry for the thread jack, but is in the same vein.

I'd be keen to hear from anyone who has done this as I don't need a big 4 bedroom house to myself but love the homes position. So a lock up and leave little 2 bed flat seems attractive.

 

Thank you for your response and recommendation , especially on the brick idea. I seeBlue gums still operate . I will reach out as well .

Also while you are purchasing did you get your Granny flat considerations/quotes etc run in parallel ? Or did you decide to build a Granny on one of your existing plots . Currently I am in finding the right plot . I was wondering should I be engaging the Granny team before I buy so they can assess or after I buy . I am speaking to a few this week , would be good if you have any guidance.

Regards

 

you should be able to call granny flat Sydney to do a preliminary site assessment for the site if you are purchasing new. but you can also do your own research as well, do more reading here and somersoft.

you should get multiple quote, there are many out there and find the one that you feel most comfortable to work with. Most builder should also have showroom and do open homes on completed granny flat, suggest you to visit/sign up to do meet the builder onsite.

 

I too have used Blue Gum and was very happy. No issues at all.

If you don't know what the site requirements are, you should definitely ask a builder if a property is feasible prior to purchasing.

 

We found engaging an approvals and design company worked well for us.

With the design to suit the site done we could then get like-for-like competitive quotes from different builders..

You lose a lot of bargaining power locking in a builder early in the process.

 

That makes sense - do u have any approvals and design company to recommend ? Thanks

 

We used the one I linked in the post above.

 

Getting the right site and design for that site is the key to a good project - cannot effectively design and plan without the site.

After the first one we really knew what to look for in a site.

 

Building a granny flat is probably the best way to manufacture and increase your rental yields, especially for Sydney.

Been seeing alot of these in western Sydney areas.

 

I can provide some insight into completed rental values. I manage a weatherboard house in Blacktown, previously rented for $450pw - comfortable simple 3 bed, 1 bath interior, bath and kitchen updated about 10 years ago, now rented for $420pw with smaller backyard (but still good amount of grassed space) and concrete area for parking a car out front.

2 bed 60sqm grannyflat built out the back (owner's budget was about $130k inc landscaping) which has been rented $385-$400pw since new. There's quite a lot of granny flats on the market in Blacktown - I would try to differentiate by providing an off-street parking space if possible and having a functional well-designed yard.

 

I was in Blacktown this weekend and what I noticed is that there are already a lot of properties out there which 1) has been subdivided or GF added and 2) your looking at at least $800k for land that big where you can add a GF. You have to ask yourself if you’ll get the return your looking for.
If the numbers work.. great strategy. I know many people who have done this in Blacktown, but they all purchased their properties at $300-400k, so they are getting amazing returns.

 

There's a pocket in north Blacktown between Turner Street and Vardys Road that tends to have houses on bigger sized blocks. Some have multiple townhouses developed already; some have granny flats/dual occupancy and I know a few people land banking with just the original standalone house. If you manage to secure youself one of these gems; there's much potential for doing what you want to do. A cursory search of realestate.com.au shows 18 Turner St and 62 Turner St listed for sale. ~850sqm and ~1000sqm land sizes.

 

Just reviewing the GF strategy and it seems building GF lowering the market value/ valuation?
For example, I see these two sets of properties, with and without GF and the price difference is around 60K?
Understand the cash flow ( ~20K per annum, over 5 years 100K, not huge) is it really worth to build GF?

With GF-

86 Rooty Hill Road South, Rooty Hill, NSW 2766 - 523 sqm block size - sold for 845K
https://www.realestate.com.au/sold/property-house-nsw-rooty+hill-138077126

16 Orion Street, Rooty Hill, NSW 2766 -620 sqm block size - sold for 820K
https://www.realestate.com.au/sold/property-house-nsw-rooty+hill-137876698

without GF:

494 Woodstock Avenue, Rooty Hill, NSW 2766 - 575 sqm- sold for 780K
https://www.realestate.com.au/sold/property-house-nsw-rooty+hill-138245370

20 Willis Street, Rooty Hill, NSW 2766 - 708 Sqm- 865K
https://www.realestate.com.au/sold/property-house-nsw-rooty+hill-138024566

 

@San2018 With GF, it varies based on the quality of the build as well as how the land is apportioned. I've got a corner lot with a house and granny flat and I can guarantee you that its worth more than a single dwelling by at least the price of the granny flat itself.

I prefer to build the GF as you get depreciation benefits as well. After a few years it really does pay itself off.

 

Is there something wrong my example above?

 

@San2018

For the one on 16 Orion Street, Rooty Hill, NSW 2766, it's a teenagers retreat which is not a council approved granny flat (did not go through CDC or DA). As a result, these sell for much lower as it's not a legal granny flat.

For the one on 86 Rooty Hill Road South, Rooty Hill, NSW 2766, I can't say if it is council approved or not, but I believe it wouldn't be if it sold for that price.

If you look at these in Dharruk and Emerton to compare:

https://www.domain.com.au/6-6a-gira-place-dharruk-nsw-2770-2017577295 895k (A renovated 3 bedroom in Dharruk sells for 770k which means this is at 125k above, and the main home for this one is not renovated)

https://www.domain.com.au/55-55a-copeland-road-emerton-nsw-2770-2017515243 $905k (A 3 bedroom home in Emerton usually goes for 650-700k, this is 255-205k above)

 

Makes sense. My bad is didn’t check properly.

It seems it’s less than 60 SQM Gf at 86 Rooty Hill
Road.

 

All good. That one is definitely less than 60 sqm.

If you ever see 'teenager's retreat', the lot will usually only sell for a bit more than a normal one as its basically counted as better than a 3 bdr home, but not as good as a 5 bdr home so its inbetween.