the next move...

Hi guys,

I'm fairly new to the forum and am loving the massive amount of knowledge here.

I have an IP on the central coast in NSW, its a relatively small 3 bedder, with no driveway therefore no car parking provision. The site lends itself to have a granny flat at the rear, it is a sloping block, the rear portion of land (where the GF will be built) is already retained and has a separate path to access from the street. The dwelling has no windows along this side so privacy is maintained.

I'm at a crossroads as to whether to use the equity in this IP and another I have to purchase a 3rd IP which may eventuate into my PPOR, or develop the first IP to increase equity and be able to borrow more.

If the granny flat build was to go ahead I would get the driveway done at the same time to save costs. Would creating a carparking provision increase value by much?

I've heard that a GF adds approximately dollar for dollar equity, I've also heard reports it's around 80% of what is spent. Can anyone clarify?

 

Building a GF for most is a play for cash flow, not CG.

If you are looking for CG then buying another property should be the better option.

Two different goals, what is most important to you?

 

If it were me, I would buy another property that is cash flow positive in an area set for capital growth. Spreads your risk, improves your asset base. You could still do the granny flat down the track to improve your servicability when it dries up.