Granny Flat build in Moreton Bay Area

Discussion in 'Investment Strategy' started by Ronald86, 5th May, 2019.

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  1. Ronald86

    Ronald86 Well-Known Member

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    Hi all,

    I'm interested in looking at having a 2 bed granny flat in my IP in Deception Bay which is approx 700 sq mtrs. I have already read up on the rules on MBRC council website. Max size for a GF is 55 sq mtrs.

    My main questions are:
    - Can anyone recommend a good reputable GF company to use on a minimum budget as I don't want to overcapitalise
    - Does anyone have experience renting out a GF through an agency or otherwise is it usually done privately?
    - Anything else I should consider generally?

    Thanks.
     
  2. My House QLD

    My House QLD Well-Known Member Business Member

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    If you're in Melbourne I wouldn't advise renting anything in Deception Bay privately, you need to find a good property manager otherwise you're potentially setting yourself up for a disaster!

    Even a 55m2 GF won't be cheap I've had quotes for clients for that size around 70k+. With all the hype in Brisbane around granny flats its hard to get a good price on any size build. Make sure your block really suits having a granny flat, you need to allow good access and parking for all tenants including the main house. Also keep in mind when you go to sell the property there may be less of a demand from buyers, not everyone wants a GF in their backyard.

    What was the purchase price on the property with 700m2?
     
  3. Ronald86

    Ronald86 Well-Known Member

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    Thanks for the info, purchase price was in the low 300's. I am considering option of obtaining permits (quite costly) or GF option, or do nothing/ cosmetic renovation option for future.
     
  4. Angel

    Angel Well-Known Member Premium Member

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    Hi Richard, Was that price range in Logan or Moreton Bay or everywhere? I thought it would be more, or do you mean it's still way more with all the fees and certificates?
     
  5. My House QLD

    My House QLD Well-Known Member Business Member

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    This was in Logan and it was a transportable style of building, still looks pretty good but not a proper build. The bonus is that you can remove the GF at a later date if required. From memory it included footings but not council fees and certs. Most two bed GF in Logan the price is around 120k+.
     
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  6. Ronald86

    Ronald86 Well-Known Member

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    Would it be a similar price for MBRC, including all fees?
     
  7. My House QLD

    My House QLD Well-Known Member Business Member

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    I would assume similar pricing. Does Moreton Bay charge an infrastructure fee for GF?
     
    Last edited: 7th May, 2019
  8. Jana

    Jana Well-Known Member

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    Do you think you can rent granny flat separately?

    There are already properties which struggle to find tenants near Deceptionbay. Does MBRC allow to rent separately. I don’t see any good demand for granny as I tried to put one , the demerits were higher than merit so I abandoned. Your case could be different, do enough due diligence.

    There is one ad with 600 pw that include granny flat. I don’t see this could be rented in near future. It had been oreads there 6 weeks. It doesn’t increase the value either that much.
     
  9. My House QLD

    My House QLD Well-Known Member Business Member

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    Info sheet for Moreton Bay:
    MBRC Planning Scheme - Secondary dwelling
    Note: The secondary dwelling can be separately leased from the primary dwelling.
     
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  10. Ronald86

    Ronald86 Well-Known Member

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    Yeah they do allow you to rent separately, which would make more sense. I'm interested to know what the demerits you note are as i am only in early planning and would like to consider all facets.
     
  11. Jana

    Jana Well-Known Member

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    There are few demerit:

    House value alone without Granny: $410k with 670 land. Rental is $425 pw. After addition of granny ( 2 bedder with no garage for 55 m2 building cost around 90k-100k. Few said more than that too for quality finish): the value of both property is now $510-520k. Probably can easily sell for $450k. It is hard to sell combine assets as bank wouldn’t value much. New rental will be $340+ $220 pw. Valuation wise either negative or neutral. Cash flow wise additional 100k increased $135 pw extra rental. Potentially, granny flat cannot be rented as similar to land and property. This could become so lucricative once Petrie uni is in operation, but we never know the market if too many units get flossed then students would go there. If the property sits for month without tenant then no rental gain too. The added granny reduce the privacy so people with pet wouldn’t prefer even primary house unless you provide fully enclosed fence for both which may not be feasible.

    The 100k additional money invested in buying another property gives better yield and gain than granny flat in those region. So I got a house for high 200k, did good Reno, then rented for mid 400 pw. This was good investment than granny in my previous house.

    Basically, target the right tenants and buy property that suits them. Granny flat is not impressive for me on those regions. For me they are deal killers. Long ago it was quite viable in Western NSW, like Seven Hills, Blacktown. It is no more viable there too. Your situation could be completely different. Feel free to share your figures, so we can see how it works.
     
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  12. sash

    sash Well-Known Member

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    I would strongly recomment you not build a GF....your investment will not grow!

    You are better off to put it in another location.

    I own in DBay...that market is not geared for GF...
     
  13. Ronald86

    Ronald86 Well-Known Member

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    Thanks for the info! Could you advise why?
     
  14. Angel

    Angel Well-Known Member Premium Member

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    I can't see any demand for GFs in Qld. We like our wide open spaces and we do not share our private back yards with strangers. Dumb idea.
     
  15. bamp

    bamp Well-Known Member

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    I wonder if any markets are geared for GF's, they are a very specific style of property.

    Are there any investors on this site that have a GF strategy? I haven't heard of any in real life, and you'd think if they were successful there would be lots of people who'd advocate for it...
     
  16. My House QLD

    My House QLD Well-Known Member Business Member

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    They are popular in Logan with renters. A modern recently constructed 70m2 two bed will rent for around 290-300 a week without issue IF the GF has its own space and decent car access. Demand in area's like Woodridge, Kingston, Logan Central down to Loganlea are strong due to the proximity to Ipswich and the Gold Coast and Brisbane CBD. The train line is another draw card for these suburbs along with excellent motorway access. The key is to buy a suitable property that genuinely lends itself to a GF.

    Attached is the fact sheet for Logan secondary dwellings. If you want to rent your GF in Logan to a separate group to the main house you must have off street parking for four cars (two for the main house and two for the GF) and you cannot have a second driveway. You will also pay additional rates and an infrastructure fee. Any property with limited access past the main house and not enough parking off street for four cars is unlikely to comply.

    https://www.logan.qld.gov.au/__data/assets/pdf_file/0006/322296/Fact-Sheet-Domestic-Housing.pdf
     
    Last edited: 11th May, 2019
  17. My House QLD

    My House QLD Well-Known Member Business Member

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    Heaps of them in Logan. Really depends on the individual strategy. My property manager told me about one investor who has built five in Logan, he's just finishing the last one, the other four rent for around 290-300 per week, his build costs ranged from 120 up to 150k each (a few were brick). Total rent will be about $1,500 a week for an approx 650k outlay!
     
    Last edited: 11th May, 2019
  18. Cate Bell

    Cate Bell Well-Known Member

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    I have a PP in Ashgrove, Brisbane. I have found that there are many GF in the Ashgrove/The Gap/Ferny Grove/Ferny Hills areas where GF are a strategy- many single people looking for a GF where they can have a pet, GF are renting for around the $250 to $300 mark, I am seriously considering it for a few of my properties in these areas.
     
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  19. sash

    sash Well-Known Member

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    See comment below from Angel.... the Cane toads in Qld are spoilt...they don't like living amongst each other like inbreds in deliverance.....they reserve dem for the cockraches from Sydney....
     
  20. sash

    sash Well-Known Member

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    If they are using that in Qld and VIC they are dumber than doggie shoittee...they are using a Sydney centric view of the word. GF rules are also different in VIC.