Upstairs, downstairs, granny flat - lease separately?

Hi all.
I'm currently renting after selling my first home late last year to split assets when going through a divorce. I'm looking to get back into the property market and would like to buy something that can generate income to pay off my mortgage quicker as well as provide accommodation for myself, rather than a "standard" property just for me. I'm in NSW.

I've found a house I'm considering buying, that has the following:
- Downstairs two bedrooms, bathroom, kitchen, living and dining etc.
- Upstairs that has a big living area plus bedroom and en suite. Described in marketing as "Parents retreat and master bedroom" although its not the biggest bedroom. Can be accessed without going into the downstairs house.
- Single room plus bathroom bungalow / granny flat type thing attached to the garage. Well under 60m2. This has a recently added semi portable type kitchen bench thing in it that does NOT have a kitchen sink so not classified as a kitchen as I understand it. No idea of the legal status of this part of the house, but suspect not legally a second dwelling currently, although it has been rented informally to someone I suspect.
- There is an outside door to the stairwell that has the laundry next to it. Realistically an upstairs, downstairs and granny flat resident could each access the laundry without accessing the other parts of the house.
- There is a two car garage with driveway space in front of each garage door. No room for a third car at all
- The block is a bit over 600sqm.

My idea is to live in the main downstairs house with two bedrooms (bedroom & study) for myself, lease out the granny flat, and lease out the upstairs. And ideally put kitchenettes both upstairs and in the granny flat, including kitchen sinks so they don't have to be provided access to the main house. But I realise this will likely fall foul of council/state dual & multi dwelling laws. From my basic reading it seems like 2 ban me legal but 3 can't?

Does anyone see any way that I can legally make this work? Or am I kidding myself?

My cursory reading of the laws suggests perhaps I could put a kitchen in the granny flat and get that certified, but the upstairs seems less likely. Without a kitchenette upstairs could I just advertise for a "house mate"? But then would have to share kitchen and access to the downstairs part of the house which is not my ideal.

Also, am I opening myself up to an insurance nightmare?

 

As it's all under one roof, you'll need to ensure that the two dwellings are fire separated and approved dual occupanxy, compliant with council etc.

 

You could rent them out to boarders I believe but not full on separate formal residential tenancies.

 

Unfortunately probably not. That was my original idea. But there seems to be an over supply and under demand around here, prices are far lower than I've ever been able to pay when travelling myself. And the downside of the property is that it's a bit "tired" looking. I want to renovate but can't afford to immediately, things like some stains on the carpet a renter may not care about but I feel a higher standard is expected for AirBNB..

 

Have you checked with the local council to see if what you are suggesting is allowed?

 

No not yet. Probably a task for tomorrow. I'm not experienced with dealing with council, is there a particular person I should ask for?

 

You could ask for the duty town planner

 

Until you check what you can actually do legally on your site, you are simply wasting time.

From what you said, you intend to create 3 separate dwellings on a 600sqm block. Many councils won’t allow this in residential areas.

 

Did you manage to get anywhere with your idea?