Now Western Australia and the ACT have joined pioneer New South Wales in loosening the rules so it’s easier to build a granny flat, and the resulting home can be rented out to anyone.
Building a granny flat can turn a negative cash flow property to positive – however experts warn that it is a strategy best used by long term investors as the flat could cost more to build than it adds in value to the property.
The ACT recently increased the allowable size of granny flats from 75sqm to 90sqm – large enough for a comfortable two-bedroom dwelling.
RentCover General Manager Sharon Fox-Slater said granny flats could provide attractive returns for investors.
“When doing the sums, you can count on two lots of rent from a single block of land. Bear in mind, that two tenancies are involved so you’ll need two landlord insurance policies,” she said.
- Outdoor space – will each home have its own, private outdoor space?
- Fencing – is the layout such that the granny flat can be fenced off? A corner block makes this much easier.
- Parking – where will each set of tenants park?
- Your tenant market – in a family area, reduced back yard space might make the main property harder to rent out.