In this video, Colin Fragar, our founder and CEO, shares five reasons why granny flats are a good investment.
Click on the “Play” button below to watch now:
Or for those that prefer to read, here is a transcript of the video…
Five reasons why a granny flat is a good investment. My name is Colin Fragar from Council Approval Group.
So I’m in the studio today and I’ve had the question: Are Granny Flats A Good Investment? I’d like to share with you 5 reasons why I believe that they are a good investment.
Now this is coming from myself, from my personal experiences, as well as from thousands of clients that we’ve worked with. So I know that a granny flat is a good investment because of these reasons.
1. Approval ProcessSo the first one is it’s fairly easy approval process. Now, that doesn’t mean that it’s a breeze. It still needs to go through quite the preparation process. However, it’s not as complicated as, obviously, a subdivision or a multi unit housing. So that’s the first one, don’t presume it’s going to be smooth sailing but, if you can get it in the bag, it’s probably a lot easier process than the other development types that may be available.
2. Low InvestmentOkay, the second is it’s a fairly low investment. And I want to give you caution here, please don’t go with one of those really budget builds for a granny flat that’s just basically a tin shed in the backyard. My experience has been, having done three of these myself now, is that if you put a little bit extra into the build you’ll end up getting a higher return. Which brings me actually to my third point.
3. Return on InvestmentThe third reason why I believe that granny flat is a good investment is of course that you improve the yield of the property. And if you were to do the calculation for return on investment, if you look at the denominator being the bottom of the equation, the actual cost to construct compared to the rent yield that you’ll get is quite high.
As a proportion to the capital investment that you’ll make, it’s actually a higher return on investment than a dual occupancy or a house itself.It’s quite disproportionate. And it’s quite interesting when you look at it. You think how can I get such high rent for such a low capital investment? But please don’t go too low.