Renting Granny Flats
How much can you rent a granny flat for?
It’s no arguable that granny flats are the topic of the modern days. These are completely separate residences built within already established home compounds. There are plenty of reasons behind their popularity.
First, they are convenient options for aged parents who still enjoy the close proximity to the people they care about. It can also provide comfortable housing for teenagers or in-laws on visit.
If you are in need of space, the secondary house can accommodate some items that bring clutter. Among these home advantages is one benefit of increased rent. You can build your granny flat specifically for renting out. Let’s get to work.
Can you legally rent a granny flat?
The name is what confounds many. Many are misled to believe that these kinds of flats are there for the grannies. Well, it might appear that way. It’s one of the purposes they are meant to serve.
However, the purposes have grown with time to include some money making endeavours. Even the Australian laws in many councils does allow for homeowners to rent out their granny flats on the northern beaches to the interested tenants.
You need to confirm with your council to see if they approve your project.
At what price?
This is the big question. If you opt to build a granny flat with the objective of increasing rents, you need to understand what’s in store for you. I can’t give a straight forward sum to charge after you are done with construction.
However, there are various factors that you should weigh up to land on the ideal rent figure. These include the flat floor area size, cost of building, its design, the services in there etc.
It is recommended that you research on the local rents for houses of similar size to the granny flat. Compare the different designs you may come across in the region to know where your rates should lie.
The margin can be as big as $10,000 all the way to over $140,000. Don’t be stoic enough to charge less than you are paying for services and repairs.
The loan option
It is said that the best investors always invest against the jaws of risks. With the granny homes becoming the idea of the day, many are lured into it. Those who don’t have enough capital to build one are not desperate yet.
The loan option is available as many lenders will listen to you. You just need to do your homework by doing the calculations right. If the future cash flow projections are in your favour, then a loan option will be ideal.
After the dream comes true, you will be able to refinance the mortgage comfortably. Your profits will also flow. You just have to take note that repaying the mortgage means you will pay more money that borrowed.
The pessimistic investors will say that the market will get saturated in the near future. Well, not exactly. Affordable housing in best places is always in demand.