QLD Logan Granny Flat

Discussion in 'Where to Buy' started by mick0123, 23rd Jun, 2017.

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  1. mick0123

    mick0123 Active Member

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    Hi Guys
    Just wanted people thoughts on building granny flats in Logan. It seems once complete they will yield roughly 10%. Has anyone built one? What was the experience like? How have they returned?
    Thanks
     
  2. Rich2011

    Rich2011 Well-Known Member

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    Which suburb are you looking at building one? How many bedrooms? Got any prices yet?
     
  3. mick0123

    mick0123 Active Member

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    @Richard Williams the property I own is in Kingston, I am thinking a 2 bed flat. At this stage quotes are rough ranging from 130-150k.
     
  4. dxbpilot

    dxbpilot Member

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    I have a place in Slacks creek that I'm interested in adding a granny flat to.

    Can anyone tell me how I go about finding out if it's allowed etc ?

    Cheers
     
  5. Greyghost

    Greyghost Well-Known Member

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    Search some of my earlier posts on this.
    But it's not a high growth area eg Gabba, Norman park etc etc.
    Plus you are going to spend 50% of the value of the property on an granny flat... doesn't make sense to me from a capital risk perspective.

    If you don't have difficulties with servicing and have equity/cash avaliable - buy another property
     
  6. virgo

    virgo Well-Known Member

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    i just sold my house in Kingston; was going to build a granny flat initially but just cannot make the numbers work...this area is not Sydney ...
     
  7. mick0123

    mick0123 Active Member

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    @virgo how are you calculating the returns? It seems to work for me after a 10 year period when you calculate the NPV.
     
  8. RetireRich101

    RetireRich101 Well-Known Member

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    LCC allows max 70m2 but limited to 2 bed.

    NSW allows max 60m2 and also limited to 2 bed

    as a rough guide NSW to build 60m2 probably about 120k, LCC to build 70m2 about 140k

    if we compare to MT Druitt, rental is around 300-320/wk
    Kingston/Woodridge/LC probably get about 280-300/wk

    so cost 20k more to build for the extra 10m2, but get slightly less rent

    maybe consider reduce to 60m2 build, hopefully it reduce to 120k build? me thinks the rent won't be much difference between 60-70m2, but you save 20k?

    you may be early adaptor, and bank valuer may not find comparable sales etc..
     
    Peter P likes this.
  9. Scott Townsend

    Scott Townsend Well-Known Member

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    Ive recently finished a granny flat in Kingston. If you know the right person/builder that knows the ins and outs with council, you can build one that will return approx $460pw from a $200k build.
     
  10. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    If I was you and you had the serviceability instead of spending $150k on a granny flat I would buy another 3 more houses in Logan. I think LCC is not the best time to start developing granny's just yet. Wait until each house reaches $500k then it will be worthwhile.

    (e.g) 3 x houses in Crestmead 4 bedders

    $350k each (maybe slightly more depending on how good at your negotiation skills)
    10% deposit = $35k
    Stamp Duty = $10k
    Lawyer = $1k
    Searches and Other costs = $1500

    Each house will cost approx = $47,500

    Rental you will get $400 a week.

    So you now have 3 x more properties with potential to grow in capital gains + your mostly going to be +ve geared + on 3 houses your weekly rental will be $1200 a week.

    I think the above example will result in a better outcome especially in Capital growth than adding a granny over the next 5 years. Thats what I would do.
     
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  11. RetireRich101

    RetireRich101 Well-Known Member

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    Can the average Joe on average income do this now in the post-APRA era?

    the newer house you chose my have some depreciation icing, but bank don't take them seriously for servicing..
     
  12. eletronic_exp0430

    eletronic_exp0430 Well-Known Member

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    Thats why you need the connections via mortgage brokers to make it work. Look at 2nd tier lenders that dont need to meet APRA requirements. They still even give 95% LVR but at really high interest.

    90% LVR no issues - my current pre-approval for $450k is 90% LVR. I've been using 2nd tier lenders for the last year because my portfolio is quite large now (almost 20 properties) and to keep going you need to get creative.

    But the op sounds like he is < 5 properties still. Should be relatively easy imho.
     
  13. dxbpilot

    dxbpilot Member

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    Thanks for all the info. I am not a resident so I have to come up with 45% deposit but I get what you're saying. Maybe something for the future then !
     
  14. Greenjoy

    Greenjoy Member

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    I built a 2 bedder 68sqm granny flat in Woodridge in early 2016. Contract price was 113.5K. It probably cost me another 10K+ for landscaping, A/C, blinds, driveaway, clothesline, noise engineers report, and the list goes on. Rent for the first year was $330/wk, but the original tenant recently moved out and we had to reduce to a more reasonable $310/wk to attract a new tenant.

    But yeh, if given a choice between building a granny flat or buying another IP, I'd recommend the latter. If you have no more capacity to buy, then that's a good time to add a granny flat to increase your cash flow I think.
     
  15. Peter P

    Peter P Well-Known Member

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    How did you find the process? Could you share the contact of the builder please.
     
  16. Greenjoy

    Greenjoy Member

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    The building process was straight forward from my perspective. The builder assessed the available land and designed an appropriate building to suit (taking into account a drain which we avoided). To build over the drain, I believe we would need to go through a DA process which would have added time and cost.

    With the basic design ready, I was able to suggest changes such as additional storage, window sizes, etc. Throughout the build, I had to choose finishes for the kitchen, bathroom, floating floor, colours for the roof cladding, colours for walls, etc. All the fun stuff. :)

    As I mentioned in my earlier post, we had to engage an acoustic engineer to check the noise levels from a nearby main road. As the results came back in our favour, we did not need to do any noise insulation which would have added to the construction cost.

    The one issue was the finance. As I was using a construction loan, the 'as complete' valuation only added about $65K above what I paid for the property. So it meant I had to add about half of the construction cost out of my own pocket. As I had extracted equity from another IP earlier, and was told by my broker I did not have the servicing to buy another IP, I did not mind using these funds to make up the shortfall for the build.

    I will PM you the builder's name.
     
  17. Invest_noob

    Invest_noob Well-Known Member

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    How id this affect the main house? Did you have to lower rent on the main house because you don't have as big a backyard?

    So you've paid about 123.5k for something that the bank values at 65k? Sounds a bit scary actually. How is this making you money? Not trying to offend, genuine question.
     
  18. magyar

    magyar Well-Known Member

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    Anything over 100k for a granny flat is too much imo. Friend of mine built a luxurious granny flat 2 bed 2 bath 1 powder room, big open kitchen, ducted aircon, custom cabinetry for his parents sub 90k. Without all the bells and whistles would have been about 70k. Or even cheaper just buy a modular home or shilling container and convert it.
     
  19. gach2

    gach2 Well-Known Member

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    @magyar did you friend owner build or use a builder
    notsure where you can find a modular home (most seem to be around $100k +,more than built on site homes)
     
  20. magyar

    magyar Well-Known Member

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    Owner build sorry forgot to mention that. However there are builders that can also do it under 100k, just have to be savy about it and cut costs where you can.
     

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