While there is talk of a depressed market, and some people are holding back, we believe a smart investor knows that the perfect time to buy is when others are not…..

The canny investor can find themselves some good bargains if they think a little bit laterally and think beyond the usual four walls and a roof.

Over the last five years or so, we have been smashed by investors wanting to buy properties suitable to add a free-standing granny flat; in fact, our data shows investors have been paying up to 20 per cent more for a property suitable for adding a granny-flat than a comparable property that was not suitable.

But it’s not just us – the latest data from Core Logic is predicting up to a 30 per cent boost to suitable properties – https://www.corelogic.com.au/news/granny-flat-could-boost-property-values-30-percent

Why are granny flats so popular? Apart from the obvious benefit of giving older or younger family members independent living space whilst having a degree of security by being close to the family home, for the investor they really do open the doors to an additional source of income.

Although granny flats usually rent out for less than the price of a standard house, the plus side is, it does make them more attractive and affordable option for renters on a budget, and easier for people to stay in their preferred, desirable area.

This makes granny flats a very cost effective and effective way of earning an income – take a look at the figures:

A standard 3-bedroom home in our surrounding suburbs costs around $450 – $550K and would return say $480 per week; that’s a gross return of around 4.6 %. Add a granny flat for $140K you would get around an extra $350 per week giving an overall gross return now of 6.7 %.

Over the past month, we have sold two properties that were perfect for adding a granny flat and they both sold in the $400-450K range. Neither of these properties were purchased by investors yet would have returned in excess of 7% with the addition of a granny flat.
18 months ago buyers were lined up to purchase this style pf property with them regularly selling for way above asking price. An astute investor knows, that the perfect time to buy is when others are not!

As always with property, a bit of research is needed and one thing you will need to check is the legislation; have a look at the fact sheet from the NSW Government https://buildcert.com.au/wp-content/uploads/2015/06/Granny_Flats_Generalinformation.pdf and speak to an expert who can advise what you can and can’t do.

Now the other thing is just because a property meets the requirements to add granny flat, it may not necessarily right to add a granny flat for various reasons.

For what does make the perfect property, contact Craig or Kellie Andriessen 02 4956 9777, send us an email to mail@newcastlepropertymanagement.com.au or better still, come into our Cardiff office so we can talk more.

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