Listen to Colin Fragar, co-founder of the Council Approval Group, discuss how to get the most value from a granny flat.
Click on the “Play” button below to watch now: Or for those that prefer to read, here is a transcript of the video…
So will a granny flat add value to my property? My name is Colin Fragar from Council Approval Group. I really want to share with you today some insights which have come about from a whole bunch of different things. Some come from the book that I helped to write, Secrets of Property Millionaires Exposed. It is awesome just to be able to unpack some of these ideas around granny flats. Also, if you haven’t already, please grab Your Ultimate Guide to Council Approval, because we do talk about secondary dwellings and granny flats in here and I think that is relevant to the discussion.
Does a Granny Flat Add Value?But the question that you might have on your mind is – if I go to the effort of building a granny flat, is it really going to add value to my property? So we need to break that question down into different pieces.
Rental ReturnFirst of all, in terms of the rental return, yes the rental return is going to be more. So we start to add more value to a property and additional rental income. So say you’ve got your existing house here, and you’re building this granny flat, then the cash flow, which is coming out of here is going to be significantly more.
…if you go for a slightly premium build with a granny flat, then you do actually get a higher cash return. So don’t be tempted to build the cheapest granny flat…And something that I’ve noticed in my own projects, is that if you go for a slightly premium build with a granny flat, then you do actually get a higher cash return. So don’t be tempted to build the cheapest granny flat, the one that looks like a shed that no one wants to live in, go for the premium version. And you can almost, in some areas, rent out a granny flat for almost as much as a house. It’s disproportional and it’s kind of unusual. So does it add extra cash flow? Yes, of course.
Does a Granny Flat Add Capital Value?Does it add capital value? Well, yes, it does, but not as much as some other development types. Now this is an important point. As soon as you add a granny flat to a property, yes, you’re adding in capital improvements. So the cost of the build at least and probably a little bit more, but it’s not going to be as valued as high as if we can get something better for you.
In this ultimate guide we go through an investment strategy, which is my favorite and one I talked about in Secrets of Property, Millionaires Exposed, the best selling Australian book. In it we go through for you a dual occupancy subdivision, which is really where you split the title. Dual occupancy subdivision sometimes allows you to depart from minimum lot sizes. It’s quite complicated to go through, but it’s something we can look at for you.
Take the Next StepsSo if you’re considering any sort of a development for your property, what I highly recommend is that you book in for one of our consultations on our website. So councilapproval.com.au is the website you want to go to if you have a look at that. Click on there now, go across booking an appointment, what we’ll do is we’ll have a 30 minute consultation with you about what you’re trying to achieve. It’s really hard in a video to go through your actual specific questions that you have, so come prepared. We’d love to be able to work out a strategy for you and to really to start to work out what’s the highest and best use for your property so we can maximize your investment return.
Hopefully, there’s been some good insights for you in working out whether or not a granny flat adds value to your property. My name is Colin Fragar from Council Approval Group.