Potential Tenants Granny Flat

hi

I am considering building a GF in my investment property in Hornsby (Sydney). Its a corner block so access wise will be good for both tenants plus its a decent block.

My concern is primarily around the sort of tenants GF will attract and will it be easy to rent out. Why wont the prospective tenant prefer renting out an 2 bed apartment for say $450 per week vs renting out GF.

Keen to get some general steer. If someone has experience in the hornsby market, will be excellent.

 

Not having to climb the stairs?

Nothing wrong with a Granny Flat - a young family may prefer it over an apartment block.

 

There are lots of tenants who would prefer a small yard / garden to potter around in rather than being restricted to a high rise balcony. They might also like to have a small pet that strata bylaws might forbid. They don’t have to deal with smoker’s second hand smoke drifting up to their apartment or visitors potentially parking in their space.

 

Isn’t the GF flat bit smaller than an typical apartment which also has garage etc. plus generally apartments are better located near transport node.

My current PM doesn’t think GF is a good idea

 

I don't get what the worry is. A detached granny flat with its own frontage is pretty much just a small house.

There's a market for small houses, and they're often better than apartments or strata'd villas/townhouses.

 

Similar locations I would pay a small premium for a stand alone granny flat.

 

Worry is spending $100k+ and then not being able to rent or rent at a heavily discounted price ! Plus also discount the rent of main dwelling given part of backyard is now gone.

 

In general, GF's can impair the value of the primary residence, and make the properties appeal only to investors on resale.

That said, in this case a granny flat on a corner block with it's own frontage does mitigate this problem. I can't see a problem - go for it!

 

Well really that's like the first step in doing a feaso for a GF development - have you done your DD on what rent you would get?

 

Good point mate. The main dwelling is pretty old as well 1960 fibro built. So buyers will be investors as you noted or someone just buying land. Dont think the value addition will be $ for $

 

Have spoken to 2 agents n searched market. There hv been atleast 5 GF on market currently and some atleast for 3-4 weeks. Suppose i have started looking at wrong time of year given the holiday season.

What triggered it is that the current tenant in main dwelling is leaving shortly. So if I want to do GF - immediate decision is to put a fence to carve out GF land and rent out main dwelling for reduced $$. However that requires conviction of rent/rentability for GF which i am struggling clearly given the slow market i suppose.

 

Are you just comparing against other GFs? I find that a bit weird. Aren't there villas or apartments that are comparable?

 

I know what you mean however apartments are near station. Am in low density area about 1.5km from station. Suppose i will chat to more agents tmrw and see what they hv to say - hoping some will be back on deck.

 

If your house is a forever home and on a corner block, I say do it! Fence it off and enjoy the passive income years down the track. There MAY be land tax implications though, depending upon what else you own in NSW.