This week, Ipswich & Logan Granny Flats, the largest builder & supplier of granny flats in SE Qld, bring to you a great article highlighting the countless ways a granny flat can turn your backyard into a positive cash-flow investment! Think your backyard could use some sprucing up? Consider the granny flat solution – it can double your rent return!
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Read and enjoy…

Maria Krohn had paid off her house when she decided to build a two-bedroom granny flat in the back yard of her house in Concord in Sydney's inner west.

"I wanted to buy a little two-bedroom unit in the area but I would've probably had to spend $600,000 or $700,000 and so I decided to go with a granny flat instead," Maria says.

"It had a build cost of about $140,000 and all up with council fees and so on, it was well under $200,000."

Granny flats are proliferating like crazy, at least in NSW where the rules are much more relaxed than Victoria.

They can be great investments, with the rent earned as a proportion of the cost of the flat usually higher than for an investment unit. Figures from Flatmates.com.au suggest the average rent for a granny flat in Sydney is almost $300 a week.

In Maria's case, she rents the flat out on Airbnb for more than a $100 a night and it's almost always occupied.
The 54-year-old senior administrator has been letting it out to visitors from overseas and interstate, with the average length of stay at four nights.

"[The bookings] have been pretty solid and it is really like my second job now because I go into the flat between visitors to change bed sheets and get it ready for the next guests," she says.

Maria borrowed the money for the granny flat, with the loan scheduled to be repaid over 10 years. The repayments come straight out of her pay, but she puts all of the rental income into her loan and she is on track to pay it off in five years.

Property investing expert Kevin Lee, of Smart Property Adviser, says the high prices of city properties mean the rental yield can be much higher for granny flats.

"But the granny flat has to be in right parts of the city and has to be of sufficient quality," Lee says.
He says there are granny flat kits that sell for under $50,000 that are put up by builders in the backyards of houses a long way from the city centre.

You could rent these out on longer-term leases, to a young couple or someone who can't rent an apartment because they have a pet. But Lee thinks the better investment proposition is high-quality granny flats that are closer to the city and on good public transport links.

Wally Gebrael, the owner of builder Granny Flat Solutions, who built Maria's granny flat, says not everyone is comfortable with having someone living in their back yard.

"Others look at it as a small sacrifice in return for the rental income they receive," Gebrael says.
More than half of his clients are investors, with many in their 50s, he says.

Government figures suggest the demand for granny flats in NSW has soared since the planning rules were liberalised in 2009, increasing by 260 per cent in the five years to 2014 and a further 20 per cent from 2014 to 2015. 

Granny flat approvals in NSW are running at an annualised rate of about 5000 compared with about 1400 five years ago, and make up about 10 per cent of all dwelling approvals, says Kim Hawtrey, associate director at property forecasters BIS Shrapnel. 

In Victoria, although there are some variations from council to council, generally, small backyard dwellings cannot be rented out. They are meant to house "dependents" of the owners of the granny flats, such as an elderly or disabled parent or a teenage son or daughter. And when the dependent moves out the flat, the flat is supposed to be removed.

The Andrews government was elected in Victoria with a commitment to review the restrictive rules that basically stop granny flats from being built without having to go through the hassle and expense of a sub-division.

Under NSW's fast-track approval process, a certifier can be used and if the plan complies with the planning rules there is no need to apply for a development application from council. Straightforward approvals take less than 14 days.

Anyone thinking of building a granny flat has to take care over how the flat is financed, because lenders are generally charging investors higher mortgage interest rates than they do for owner-occupiers, with a differential of 0.85 percentage points on average.

Some lenders will charge the investor rate for a granny flat if it is to be rented out or used for business purposes.

Gateway Credit Union has recently released mortgages specifically designed for granny flats.

Crucially, borrowers will be charged the same rate of interest, regardless of whether the granny flat is used to house a family member or is rented out.

Gateway chief executive Paul Thomas says the product is in response to soaring demand.

"The explosion in granny flat construction really is a case of homeowners realising the financial and lifestyle value sitting in their own backyard," Thomas says.

Mortgage Choice chief executive John Flavell is sceptical, saying it sounds like marketing spin on a regular mortgage for home renovations or an extension.

"I think consumers will want to get credit at the lowest rate possible," Flavell says. "It's either an extension to a home loan; a loan secured over a mobile dwelling, which is effectively a caravan; or it's unsecured lending. The extension to the home loan is the most cost effective."

However, Gateway points out that some people would be unable to get a top-up on their home loan because the cost of a granny flat is a lot more than the average loan for renovations. If the customer is forced to get a construction loan, the rates are usually much higher.

It's important not to overlook the tax implications. The principal place of residence is free of capital gains tax, but if the granny flat is rented out, that part of the property will be taxable in the event of a sale. And, of course, all investment income is meant to be declared in tax returns.

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WANT TO BUILD A GRANNY FLAT IN YOUR BACKYARD?
 
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This week, Ipswich and Logan Granny Flats, the largest supplier and builder of granny flats in SE Qld, bring to you an article following the announcement that amongst other regions, Ipswich is experiencing tight vacancy rates.  This means there is a strong need for more housing construction – which means plenty of tenants for you!

Looking for an investment property to begin with?  

Think your existing investment property could use a granny flat?
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Look no further than Ipswich & Logan Granny Flats.

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This week, Ipswich and Logan Granny Flats, the largest supplier and builder of granny flats in SE Qld, bring to you a lovely article that strikes similarities close to home.  We are finding that about 1 in 4 of our own granny flat projects follow much the same story line as the Berne families …
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Looking at downsizing yourself?   Look no further than Ipswich & Logan Granny Flats.

Read and enjoy :

 The Daily Telegraph | Brooke Williamson
May 10, 2016

The Berne family downsize and move in with their children and grandchildren.

THE Berne family have just celebrated their first anniversary of three generations living under the same roof.

John and Anne Berne, their son Mick, his wife Prue and their two children Jack and Ruby made the big decision to leave their respective homes to buy a large, five-bedroom house with a pool, in Cromer on the northern beaches.

It’s a growing trend, according to census figures from the Australian Bureau of Statistics — although most intergenerational families living together include widows, or single parents.

According to the statistics, 73 per cent of older people living with their children were widowed. This was more common for women than men (77 per cent compared with 60 per cent). Among this group, 1.9 per cent of older people were living in a multi-generational household where the older person lived with their child and grandchildren, with or without their partner.

At Cromer, the elder Bernes have two of the bedrooms — they sleep in one and use the other as a sitting room — as well as a bathroom which is set off from the main area of the house.

Prue and Mick have a bedroom and office which is upstairs, while the children’s rooms are located together and closer to the main living area and kitchen.

John, 62, and Anne, 63, had lived in Coogee and had downsized from their house to a unit. They jumped at the chance to pool resources with Mick, 34, and Prue, 32.

John and Mick also work together in the family business, Jackeroo Cleaning Supplies.

“I love being back in a house, with a lovely backyard and a normal clothesline,” Anne says.

The family had many discussions, set some clear ground rules and agreed that the new arrangement was a five-year-plan.

“And we all knew that if it doesn’t work, it doesn’t work but at least we knew we’ve tried,” Anne says.

One year in, things are going marvellously and many more families these days are looking to replicate the Bernes’ success in different ways.

With vacant land in Sydney becoming more scarce, many homeowners are demolishing an old home to make room for two new dwellings.

There are many councils in NSW which allow duplexes — two separate homes with a common wall — to be built to cater for multiple generations.

Home builder Masterton Homes has 14 duplex designs and the company’s dual occupancy consultant Carol Charlesworth says they are being built by a mix of people.

“It is a combination of families where the parents live in one side and the children on the other, or it could be an investor wanting to capitalise on the potential of onselling each unit or taking advantage of a very good rental return,” she explains.

Granny flats are also an extremely popular option and NSW Government statistics show that more than 100 granny flats are being built each week in Sydney. This is three times the rate of construction five years ago.

NSW also allows for “Fonzie” flats, named after Henry Winkler’s character Arthur Fonzerelli in the 1970s television series Happy Days, who lived above the Cunningham’s garage.
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“Fonzie” flats can be included over a garages in new homes, and sold separately to the primary residence.

​Some things to bear in mind if you are considering have several generations live together on the one property :
1.     Have a meeting set and have clear boundaries in place
2.     Be open.  If something isn’t working, don’t leave it — have a chat
3.     Be open to the fact that it might not work
4.     When you are being a strict parent, have boundaries in place but also respect the fact that grandparents want to spoil the children
5.     Learn to let the little things slide

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LOOKING TO DOWNSIZE YOUR FAMILY HOME?
 
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This week, Ipswich and Logan Granny Flats, the leading builders for granny flats in SE Qld, bring to you an exciting update as Orange City Council redevelop the former hospital site into a mixed housing development – including granny flats!!   This will leave fantastic opportunities for investment and housing solutions.
 
Read and enjoy:

THE masterplan for the proposed redevelopment of the former hospital site reveals some buildings are earmarked for demolition, while the main building will be refurbished into a 28-unit apartment block, to be surrounded by terrace houses, granny flats and semi-detached two-storey houses.

 “Once the development application goes ahead in June we will just have to see the expressions of interest or whether council will be a major partner,” said Orange mayor John Davis.

“If that’s the case it will be a staged development.”

The masterplan shows the site divided into four blocks comprising residential, terrace and mixed use housing.

Orange City Council planning and development committee chair, councillor Russell Turner said he was pleased the original and historic ambulance station on the corner of Anson and Prince streets would be retained and refurbished, possibly into a wine bar, cafe or gallery.

“It will open up enormous opportunities  for residential living and the people of Orange,” he said.
The whole development site, bounded by Anson, Dalton, Sale and Prince streets, was vacated in March, 2011.

Since then it has fallen ito disrepair, as NSW Health Infrastructure and Orange City Council negotiated the future of the site.

Sydney-based designer Michael Heenan of Allen Jack Cottier Architects devised the masterplan for the site incorporating the retention of existing trees and the establishment of new green and recreation areas, with the planting of additional trees.

In the masterplan, Mr Heenan said the existing structure of the 1970s hospital building, with its simple repetitive concrete frame, could be easily transformed with the addition of balconies, sunshades, new windows, colour and materials.

Included in the design is a system of laneways, walkways and vehicle access to the various types of housing throughout the site.

As well, there is an option for a residential care facility on the site, with a layout allowing flexibility with accommodation as part of a residential care plan, as well as independent living.
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Following the signing of the $3.3 million contract earlier this week with NSW Health Infrastructure, Cr Davis said the next step was a development application for demolition of some sections, demolition contractor engagement and an expression of interest for redevelopment of the site.

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