Hi, Finished 2 granny flats and started a home extension this month. Will post about each separately with cost breakdowns, lessons learnt, etc. All price incl. of GST. Soft costs (design, council, etc): $13,000 (ish) Contract cost of construction: $105,000 Variations + additional work (extra pantry, concreting, water meter): $7,000 Finishes: (blinds, AC, TV antenna, shed, etc): $4,200 Total: $129,200 Rental: $350/week ROI (excl. land component): 14% Total Property Costs: $310,000 + 5% buying costs + $25,000 reno on main house + $129,200 (GF) = $480,000 Rent: $400 + $350 per week ROI: 8.12% Lessons Learnt: Granny Flat Construction - As per every other time, variations, always variations... - Wasn't happy with the quality of the end build. Not bad, just not to my personal standards. The builder rushed it as it was approaching Christmas, and there were gaps between the tiles and skirting. Had him repaint the house and move the toilet at his expense. I did a lot of additional concreting work, and requested extra cupboards in the kitchen which I should have had added in the contract at the start. - Had some brick construction on original design, difficulty finding brickies lately, heard this from a few builders, so change the design to prevent a possible 1 month delay. Rental: - Rented at Christmas time, I believe I could have rented it for an additional $20-50 at peak season, and using the unique layout of the main property which has a large storage shed (not being rented, used for personal storage). - With some smarter design (which is my new approach to construction, small but well thought out), I strongly believe I may achieve gains closer to $400, and on the right block, using the loopholes for a larger design, $450/week. (Look at Tiny Home and The Not So Big House movements). Overall Property Investment: - I may have been able to ask for less, however I feel I purchased it for a reasonable price at the time. There was a 60sqm illegal granny flat already, which I renovated (shouldn't have spent so much) and rented it as extra space along with main house for a time. - Possibly a better investment would have been a 10 room boarding house. Rooms are renting $155/week in the area, which would have made a better ROI. Valuation would have been terrible though. The cost to convert now is unreasonable as existing rooms are 3x3-3.6m and minimum for a boarding house is 3x4m. - As mentioned previously, unless you already happen to own a house purchased pre 2012 boom, purchasing a house to build a granny flat in these areas is a bad idea atm IMO.
Maybe just set them up then sell them, good return! Address available on request Jesmond NSW 2299 - House for Sale #120759749 - realestate.com.au
Dont wish to take this post off topic... But that house you gave the link to (Newcastle area) i have personally looked at when it was 775k back in July. I looked at it again when Council Officers turned up to issue the owner a Notice of Comply" now its down to 625k I believe....anyway sorry to derail this thread ..back on topic !!
