Granny flat build

Whilst we are still in the negotiation process for the CDC granny flat quote, I wanted to give a shout out to @See Change and @Blueskies for inspiring me to share my granny flat experience and to actually just do it.

Sometimes I really hate the waiting game, but I guess it's worth it because it may result in significant savings. In the meantime, we are also preparing for a major renovation in May/ June on the first IP I purchased which should result in a rent increase from $440 to $650 to $670 per week.

No progress with the DA granny flat....... but I did pay $1,100 for a local geotechnical engineer. My understanding is they will conduct a site assessment/ test on the stormwater design and complete a landslide risk assessment too. Apparently the engineer should be on site for at least 5 hours.

 

Good luck with it @jins13 sounds like you have done your research, hope it all works.out as planned. I'm still glad we did ours, rental yield on that property is now nearly $800 per week from a $520k total outlay, it's never been vacant and the property value is up around $200k as well...what's not to like!

 

Fantastic outcome and take that to all the naysayers! I haven't been scared about the increased cost to the granny flat due to material shortage and etc, because I'll get my money back by the rental return and minimal vacancies over time. I see it as a cost of doing business.

Even though it's too early to say, I'm almost expecting a good valuation once the granny flat is complete too but I think it's more to do with the market upswing than anything.

I can't wait until I can provide some pictures too but until we have finalised the quote and the contract, it's still in the infant stage. The main issue at the moment is the quote of $15,480 for the demolition/ asbestos/ concrete removal of the single car garage and surrounding concrete area. If there is no wriggle room there, I don't really want to delay the build as they can commence within a week or 2.

 

CDC Granny Flat


DA Granny Flat

 

@jins13 great thread, following with interest as I'm planning to put some Gfs in Blacktown.

 

All good @Sackie and thought it would be a nice way to contribute and give back to the community because I've learned so much. I think my situation is unique because I am doing both a CDC and DA granny flat so can share the lessons, pain points and experience with everyone.

I also wanted to demystify some of the silly nonsense from people who never build a granny flat but they appear to know everything. As far as I know, no one who has built a granny flat has said it was a horrible experience and an awful investment.

I also suggest seeing @neK videos on YouTube which shows the various stages of the granny flat construction:

 

haha where did you dig that up?
i forgot i even posted that on youtube lol

 

Cost cutting!
Some people just look at the bottom line and ignore all other factors such as a liveability and tenant turnover.

Every now and then, there is height restrictions due to setbacks.

 

@jins13
That granny flat is now rented at $500 per week... pretty much been that price since it finished building in 2012.
It already paid itself off and now its just a nice cash cow

That video brings back memories.
This was done back in the day where phones didn't have the timelapse and gopros were super expensive.

I had this hooked up to a tiny Samsung netbook PC with a webcam recording 1 frame every 10 seconds, then using video software to combine it all together into a timelapse video.

In comparison, setting a timelapse is so easy now, put your iphone on timelapse and have the charger plugged in. lol

You can actually see me and my dad in those videos asking the builders questions haha

 

I found the videos when l was looking into building a granny flat and confirmed it was yours many moons ago. Great for visual people lol

 

Getting some traction for the CDC granny flat, as we were able to haggle $1,500 off for the demolition, asbestos and concrete removal and updated quote will be emailed today. Maybe some people may argue that we wasted a week haggling but the outcome was $1,500 saved and better to ask than accept everything at face value.

During the negotiation we found out that they make around 18 to 20% per granny flat constructed. Not sure if this is true or not but this came up because we had another quote from a competitor which we used as leverage.

After we agree to the updated quote, we should receive a contract for this granny flat, which should hopefully commence early next month.

We have tenants in the main house and they are paying a little under market rent at $430 per week, which the property manager advised we should not increase until after the granny flat is built. She suggested we can increase it to $480 to $490 per week after the granny flat is built and due to the size of the land being close to 700sqm, there is privacy for both tenants. We intend to fence and landscape the area too.

It is almost like a deja vu experience because by the time the granny flat is completed, we'll be overseas and I'll be asking my parents to inspect the final property just like when my townhouse was completed

 

@jins13 in the early stages myself of planning. Just wondering if the double storey cost is worth it? Will you get much more rent for it? Or is single storey a better overall return?

Thanks for posting your experience, its very helpful!

im currently talking to Serge. Any feedback on him?

 

Thanks for the feedback!

 

It's a personal choice because the double storey will cost more as it requires more work and materials but personally for me I elected to go double storey for one of the granny flats due to the views. Also, I intend to knock down and rebuild the main house to a double storey house in the future too.

In relation to the rental return, I don't know if it will rent out more than a normal single storey granny flat because I don't think there is another one in the area, however I think this does provide some unique feature to the granny flat and may result in a slightly higher rental return.

I was originally dealing with Faraj and only recently started dealing with Serge and his sons (Nicholas and Eric), so I can't really comment. I think it's good to have your ideas and run it past them to see what they think as we had the plans amended a number of times.

 

Ok will do, thanks!

Do you have a build date yet?

 

No build date yet, but I am pushing for early May commencement for the CDC granny flat. Even if we did commence in early May, it is unlikely it will be complete by end of FY.

Of course, I'll ask the builder to provide daily pictures so I can share with the people here and also for my own collection.

I'm really curious to see what the valuations will be once the granny flats are completed but I know for sure it will increase my cash flow.

 

Update - 2/05/2022
We have received the CDC Granny Flat contract which is a contract for any home building work over $20,000. A checklist is provided for owners entering into the contract such as checking that the contractor holds a current contractor licence and etc.

In the email they've advised once the 10% deposit is paid, the construction process should commence. This is reinforced under Clause 5 of the contract, whereby it states they must commence work within 20 days of the date of the contract.

The progress payments as follows:
- 10% deposit
- 20% excavation and slab
- 20% framing and roof
- 20% gutters, cladding and etc
- 20% painting, kitchen and shower
- 10% completion and inspection

 

Update - 6/05/2022
Progress so far, we have mailed the signed contract and paid the 10% deposit. Granny Flat Approvals requested for CertCorp (CDC certifier) to finalise the approval this week, which once this is approved we should be constructing!

In the meantime, we have liaised with our property manager to advise the tenant of the main house of the construction being imminent and also reduced the rent from $430 to $400 per week during the construction period, which we will review once it's complete.

As we are in the area for the major renovation for another property this weekend, we requested permission from the tenant to walk around with the builder as we would like to install a carport. Ideally, we would like to have two carports - one for the main house and one for the granny flat. People may say it's an unnecessary cost but we think it's needed.

Lastly, with the recent interest rate increase and many more to come, I personally feel working on cashflow to be essential to manage our risks and to ensure we have sufficient safeguards in place. I remember my first loan was 6.35% PI loan but to be fair it was pre-APRA so it was easier to obtain a loan. The aim is to get the granny flats and major reno completed as soon as possible to work on my next move which will probably allow me to take some time off to rest. Sometimes as investors we work so hard and forget to enjoy the little things in life.

 

@jins13 I'm also getting a quote from one of my builders in the area. Will be interesting to see if he can be price competitive with GF approvals or not. He has said though he's built many GFs before. Will report back on quotes. Probably in a new thread I start for my build so I don't clog up your GF thread.

Following your thread with interest.