Join Australia's most dynamic and respected property investment community

Granny flat in Raymond Terrace

Discussion in 'Renovation & Home Improvement' started by striple, 12th Nov, 2015.

  1. striple

    striple Active Member

    Joined:
    31st Jul, 2015
    Posts:
    30
    Location:
    Sydney
    Hi all,

    I have an investment property in Raymond Terrace and I was thinking about building a granny flat to increase cash flow sometime in April next year. I'm not sure if it's worth it for the return... I'm just after opinion from others and what they would do in my shoes. 2 bedroom units with garage rent for $240 a week... So forking out $100k or more to get around $230 a week, what would you do? Would you wait or proceed with the granny flat?
     
  2. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,472
    Location:
    Sydney
    I don't think it is worth it for $230 a week.

    Having said that I did one not far from there and I am getting $310 per week. Cost all up about 125k.
     
  3. striple

    striple Active Member

    Joined:
    31st Jul, 2015
    Posts:
    30
    Location:
    Sydney
    $310 that's awesome. What area if you don't mind me asking? I've been watching and rental prices in Raymond Terrace hasn't been great...
     
  4. Biz

    Biz Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,472
    Location:
    Sydney
    Yeah the whole area has dropped about 10% over the past couple of years. Mine is in the Tilligerry area.
     
  5. striple

    striple Active Member

    Joined:
    31st Jul, 2015
    Posts:
    30
    Location:
    Sydney
    That's pretty good gives me hope Raymond Terrace will pickup some day
     
  6. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,502
    Location:
    Sydney
    have you looked at similar GF in the area what the going rate is? www.flatmates.com.au is a good indication of how much people are willing to pay.
     
  7. striple

    striple Active Member

    Joined:
    31st Jul, 2015
    Posts:
    30
    Location:
    Sydney
    Thanks for the link... I just had a look and it appears this is just share accommodation. I looked at realestate and can see 2 bedroom units start from $240... So I wouldn't expect much more than $230 for the granny flat...
     
  8. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,502
    Location:
    Sydney
    Well, there are people who may rent the whole grannyflat as a whole so don't dismiss that site.
     
  9. RetireRich101

    RetireRich101 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,292
    Location:
    Sydney
    There is a shop in Heathbrae that does the concrete slab, frame and cladding. Last time I was there he thinks this cost around 25k, and you will need to get someone else to do the internal plastering, kitchen, bathroom , tiling insulation, approval etc. He thinks this would be around 60-70k.. still this is under 100k but you will get your hand dirty is finding contractor...

    If this is not you want, few shops down there is a shop that does freight container conversions..
     
  10. WestOz

    WestOz Well-Known Member

    Joined:
    19th Jun, 2015
    Posts:
    625
    Location:
    WestOz
    Depends what you can get away with, access to elec/plumbing (doesn't have to come through slab), how good at DIY you are.

    A 6x6mtr 4 car garage can fit a bedroom, ensuite, kitchenette and living room, have a glass sliding door where a roller door would go (2nd hand will do), window where the other would go
    Insulate and panel the walls, vinyl the floor, will need reverse a/c, have this for the roof
    Cooldek® Roofing | Stratco

    Example
    [​IMG]
     
  11. Coconutwheels

    Coconutwheels Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    87
    Location:
    Newcastle
    I'm doing one in RT, has been in the planning for a while and will start construction next week.

    I started a thread on somersoft asking the same questions as you. I decided to go ahead as we aren't really in a position to buy any more atm and increasing cash flows is my aim, so this will still be a step forward.

    The main house is 80m2, 3brm with large hallway and sep laundry and rents for $295/week. The flat will be 60m2 with 2 good sized brms and bigger living area than the main house.

    I'm working on rent of $250/week for the flat, but I really think I'll get $275 easily. It's not a unit, it'll be a brand new 2bm house with a decent yard.

    All up cost, including s94, drafting etc will be $105k, so not a Stella return but better than doing nothing.
     
    larrylarry and RetireRich101 like this.
  12. RetireRich101

    RetireRich101 Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    1,292
    Location:
    Sydney
    Nice, can you post the actual numbers when it's completed? your experience with builder etc, and if it's easy to get rented etc..
     
  13. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,502
    Location:
    Sydney
    Which builder are you using?
     
  14. Coconutwheels

    Coconutwheels Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    87
    Location:
    Newcastle
    Will post all details as we go, I'd been meaning to start a thread as a follow from the somersoft one.

    We are using Leed Building Group.
     
  15. striple

    striple Active Member

    Joined:
    31st Jul, 2015
    Posts:
    30
    Location:
    Sydney
    Yeah keep us posted on how you go. I agree with you, I want to increase cash flow and this is the best option... Last time I spoke with an agent he reckons $240 per week. It would awesome to get $275
     
  16. Coconutwheels

    Coconutwheels Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    87
    Location:
    Newcastle
    The problem with agents is as soon as you mention "granny flat" they imagine the converted garage set up. Start calling it a dual occupancy with a 2brm house when talking to them.

    I did a GF on another property, 38m2 one, the agents said I should advertise for $185-$200/week going off other granny flats. I told them $250/week which they laughed at, but it rented in a week.
     
  17. larrylarry

    larrylarry Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    3,502
    Location:
    Sydney
    Is it a one room GF?
     
  18. Coconutwheels

    Coconutwheels Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    87
    Location:
    Newcastle
  19. Richard Williams

    Richard Williams Buyers Agent - Southeast QLD Business Member

    Joined:
    9th Aug, 2015
    Posts:
    471
    Location:
    Loganholme, Brisbane
    Was it one bedroom or studio style? I was thinking of 40m2 in Logan studio style/large hotel room...
     
  20. Coconutwheels

    Coconutwheels Well-Known Member

    Joined:
    20th Jun, 2015
    Posts:
    87
    Location:
    Newcastle
    Nope, a 2brm palace 40m2 is plenty big enough for at least a 1 brm which you'd think would rent better.