numbers for building a granny flat with/without garage

Discussion in 'Granny Flats' started by menty, 9th Apr, 2018.

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  1. menty

    menty Well-Known Member

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    Is is still beneficial to build a granny flat with a garage? Do these numbers stack up?

    Build without garage
    Approx costs $120K.
    Rent: $350pw
    yield: 15.1%

    Build with garage
    Approx costs $140K
    Rent: $360pw
    Yield: 13.37%

    Does that mean that, in terms of numbers, its best to only build a 2BR granny flat without garage?
     
    menty, 9th Apr, 2018
    #1
  2. neK

    neK Well-Known Member

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    Don't just look at the numbers based on yield.
    Look at what is around you and what your competition is. What good is an estimated yield that assumes 0% vacancy because it doesn't factor in potential competition?
     
    neK, 9th Apr, 2018
    #2
  3. geoffw

    geoffw Moderator Staff Member

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    Also look at what it does for value. Many granny flats don't add a lot less value than what they cost. This does depend on the area, but spending $150k might increase the value by $75k. That might be worth it if you're in it for the long haul. Talk to real estate agents to see what they think of the value it adds, and factor that into your calculations.
     
    geoffw, 10th Apr, 2018
    #3
  4. Blueskies

    Blueskies Well-Known Member

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    I am cureenty building a granny flat and had this same decision to make. Proper LUG would have cost at least $15k more. In the end I went for a carport which was $3k instead.
     
    Blueskies, 10th Apr, 2018
    #4
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  5. Tonibell

    Tonibell Well-Known Member

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    Generally a granny flat is about affordable housing - if you add too many extras then the potential tennants are comparing it to renting a house.

    With the granny flats we have built there has been adequate on-street parking so we did not consider a garage. Also we only has side path access so there is little impact on the main house.

    Without seeing your site layout it is hard to comment - but I would expect the extra $10 p/w you get for the granny flat garage may be lost because of changes to the main house ammenity.

    Two of our granny flats have been rented for over 5 years and have just about paid back their build cost - done right (separation and privacy) they can add capital value as well.
     
    Tonibell, 10th Apr, 2018
    #5