Granny flat in Raymond Terrace

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?

 

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.

 

$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...

 

Yeah the whole area has dropped about 10% over the past couple of years. Mine is in the Tilligerry area.

 

That's pretty good gives me hope Raymond Terrace will pickup some day

 

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.

 

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...

 

Well, there are people who may rent the whole grannyflat as a whole so don't dismiss that site.

 

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..

 

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

 

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.

 

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..

 

Which builder are you using?

 

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.

 

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

 

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.

 

Is it a one room GF?

 

2brm.... Although it's never been used as a 2brm, only ever one person living in it.

Striple here is the somersoft thread from earlier this year:

Minimum return you'd do a Granny Flat for? - Somersoft Property Investment Forums

 

Was it one bedroom or studio style? I was thinking of 40m2 in Logan studio style/large hotel room...

 

Nope, a 2brm palace 40m2 is plenty big enough for at least a 1 brm which you'd think would rent better.