Are Granny Flats a good idea?
The population is ageing, and retirement accommodation is becoming increasingly expensive. This combination of factors has led to a resurgence in granny flats around Australia. But are they a good idea, and will one work for you – not just now, but will it contribute to your return on investment?
After all – it’s good enough for the Royals. It is reported that the Duke and Duchess of Cambridge are considering renovating their London residence to accommodate Kate’s parents when they come to stay… the rumoured £1million building costs are however perhaps a little more than the average household budget!
Childcare costs are also escalating, and many working families find that they are working just to pay the fees of a childcare centre. In these circumstances, and depending on your relatives, a granny flat could present a good option. Mum goes to work and Granny steps in to look after the children without having to bundle them off to day-care. Sick days are a problem of the past and you might even be lucky enough to have a Grandma who helps prepare dinner too.
However – it’s not for everyone! You have to really love the in-laws that are going to be sharing your living space – even if they are tucked away in the corner of the garden! The potential for friction is quite high, but if this can be avoided, it may very well make economic sense and save a fortune on nursing homes too.
Before you can even consider this as an option – you will need to check your council’s by-laws to see if they will approve this kind of structure.
Granny flats are of course, not only for Grannies. They could be appealing to a buyer who has older children living at home (and this is another social trend that we are seeing more and more of) or, it may also appeal to a buyer who sees advantage of additional income in renting out the flat either long term or on the short-term letting market.
Before you get too excited by the idea, there are other considerations you need to factor in:
- The cost of building.
- The ease of access on your property.
- Will you need extra parking facilities?
- Whether the increase in potential value of your home sufficiently covers the actual cost of building.
- If you were to relocate and wanted to rent the house out, what would your likely rental amount need to be and could this be a deterrent? It is unlikely that you could have two tenancies on the one property.
Clearly many people think they are a good idea and councils across some parts of Australia have seen an increase in this type of building approval.
As with anything in real estate – do your research first, weigh up the pros and cons, get good financial advice and make an informed decision. And – you may like to check with the Grandparents as to how much baby-sitting they are prepared to do!
Justin Ruan | Licensed Real Estate Agent | Certified Practising Valuer | 0430 182 389