Granny flats have become one of the most popular solutions for affordable housing across the country. As a result, state and territory governments have relaxed the rules and regulations to allow more home owners to utilise the space in their backyards. However, despite their popularity, granny flats aren’t necessarily the safest investment for all home owners.
Increase the value of your property
Adding a granny flat to your property will generally increase its value. Granny flats are considered an asset that future buyers will likely be willing to pay more for. If you’ve got the space in your backyard and you’re planning on selling the lot in the future, a granny flat could be a worthwhile investment.
Source of income
Renting the granny flat on your property will give you another source of income which can be used to cover household bills or pay back the mortgage. You can also use the rent money to cover maintenance costs of the upkeep the granny flat will require.
Space for the family
Granny flats are good for more than just an investment for the wallet. Creating more space for grandma when she visits, or the children as they grow older will help ease the pressure on space inside the house.
Granny flats cost money to plan and build. Once they’re built, there will also be maintenance costs, just as there are with your own house. If you’re not planning on renting the granny flat out, these expenses will need to come from your own pocket.
Renting out your granny flat exposes you and your family to dealing with tenants. You’ll have to live beside or in front of your tenants which means you’ll need to take the time to find someone who you and your family can get along with.
Future of your property
In some states across the country, rules dictate that once you build a granny flat on your property, you will not be able to subdivide in the future. If that’s an investment you’re planning on making down the track, consider whether a granny flat is going to be more beneficial for you or not.
State and territory legislation
You’ll also need to check with your state and territory regulations regarding the renting of your granny flat. You might not be allowed to rent out your granny flat at all, and instead, will only be able to use it for yourself. Granny flats may be rented out in NSW, Western Australia, the Northern Territory, Tasmania and ACT, but cannot be offered as rental apartments in Queensland, Victoria and South Australia.