Granny Flat Investments
A granny flat investment adds great short and long term value to your property portfolio by giving you the ability to make use of every inch of your land. As housing affordability issues continue to be a struggle for many Australians — not just in our capital cities but also in growing regions such as Newcastle — the market for affordable rental properties is only going to continue to grow.
We’re confident in recommending the benefits of adding a granny flat to your property as we’ve seen first hand our clients getting a positive return on their investment.
You could rent out a granny flat for anywhere from $300 to $450 per week in the Newcastle area and create cash flow with positive gearing and a 10% to 20% gross yield on investment. In the long term you’re adding $150k plus value to your property and building your wealth using the space you already own.
5 Reasons why a granny flat is a great investment
1. Easy approval
You can receive your Designer Granny flats approval in as little as 10 days, without council approval, thanks to a NSW compliance development system called a Complying Development Certificate. If you meet set criteria we can save you time and stress by submitting all the applications and documents required to the Private Certifier to get your project moving.
2. Positive Gearing
While many people build or buy properties with a negatively geared finance arrangement, the low cost and high return of a Designer Granny Flat provides a smart way to positively gear your investment. This means it’s putting more money back in your pocket than the cost of servicing loan repayments. Your Newcastle Designer Granny Flat could be providing $12,500 per year after interest repayments. Click on this link [https://www.backyardgrannys.com.au/granny-flat-calculator] to use our granny flat investment calculator and find out how big the return on your investment could be.
3. Depreciable Asset
You will receive significant depreciation entitlements thanks to your granny flat investment. Research conducted by BMT Quantity Surveyors shows the average first year depreciation is $5,288 building up to $23,713 in deductions over the first 5 years of the property’s life. These tax deductions can make a big impact to your tax bill and help you build more wealth while staying in a lower tax bracket.
Construction of a designer granny flat is only a fraction of the cost of buying an additional property or building a standard three-bedroom home. Building a secondary dwelling on land you already own makes a lot of sense. It can bring in a rental income of $350 per week in the Newcastle area and help you kick-start your investment portfolio without the burden of a large and difficult to service loan.
5. Property Value
Creating room for additional occupancy is a good way to increase your house and land valuation. Whether you intend to rent out your new designer granny flat or use it as a guest house or a teenagers retreat, it will increase the value or your property. Even if you do decide to use the space for your family, by choosing to build a separate, self contained granny flat instead of an extension, you’re giving yourself the option of generating rental income in the future if you do decide to rent it out.