The term “granny flat” is often mistaken as being just that, a small home for your granny! But now days there are many different reasons why people choose to build a granny flat on their property. A granny flat is a very cost effective alternative for a 2nd dwelling. The uses for a granny flat are endless and can adapt to your lifestyle as it changes. It may start off being a space to run your home business and then turn into a retreat for your teenage children. Once they move out, it could be the perfect place for your elderly parents to live rather than a nursing home. No matter what the reason, a granny flat is a worthwhile, versatile and profitable addition to any home.
Down sizing? A lot of “empty nesters” who absolutely love their neighbourhood but don’t need the great big home any more choose to build a granny flat on their land. This means they can stay living where they love in a new, modern and low maintenance home… but best of all they can reap the great financial rewards from renting out their other home.
Retirement / over 50’s village alternative… Over 50’s villages and retirement homes are not for everyone, they are very expensive to buy into and there are many strict rules and restrictions on the occupants. They can often feel cramped and claustrophobic and lack the privacy that most people desire. But the worst part of owning a dwelling in one of these villages is that you can never own the title of the land, the land belongs to the village owner so you do not have the option of a reverse mortgage or seniors mortgage on it. They have quite high entry and exit fees as well which makes selling your property quite hard and banks will not lend people the money to buy it off you because the land does not come with the dwelling.
Children can save for their own home...We all want to help our children to achieve the great Aussie dream of owning their own home. Unfortunately, the sky rocketing rental market and the high cost of living makes it near impossible for young Australians to save for that elusive home deposit. Your young adult children can live in a granny flat on your land and stop throwing money away on rent.
Work from home… Operating a home based business is a growing trend as there are so many personal and financial benefits besides just saving on rent. You can work the hours that suit you and your family, saving on fuel and parking fees and not paying rent when you have holidays, just to name a few. By keeping your home based business separated from your home you are not only creating a much more professional atmosphere but you are able to still separate work from home which is very important for life balance.
Many small business owners know how expensive the rent plus out goings are on a commercial premises which can make it near impossible for a business to make a profit. By building a granny flat / studio on your own land you are not paying your land lords mortgage for them but you are substantially increasing the value of your own home.
Disability/elderly care…Caring for a loved one with a sickness or disability in your own home can be very demanding. As much as you love them and want to care for them it can put an incredible strain on the relationship. If your loved one moves in with you it may mean that you have to modify your own home to suit their special needs which sometimes isn’t what you really want. A granny flat gives you the convenience and peace of mind of having your loved one close by without encroaching on your own space, but most importantly it will give them a feeling of independence and they have their own sanctuary.
Teenage retreat…As children get bigger they get noisier and crave for more independence, privacy and a space of their own. A granny flat is the perfect solution for big kids to move out of the house without leaving home. Years later if the children ever leave home the granny flat can always be rented out for another source of income. It is a very good feeling to know that you can house your children and loved ones in times of need.
Extra income from investment… Two income streams from a single property is surely better than one, and the humble granny flat is providing attractive cash flow for many savvy investors. A standard granny flat costing around $100,000.00 to build will most likely fetch around $250.00 per week rent which equates an attractive yield of 13%. With the cost of living constantly rising, a second income will never go astray. With the shortage of affordable housing in most areas of Australia, you will always be able to collect rent from your granny flat if you desire or you can move into the granny flat yourself and rent out your home. There is nothing to lose on an investment property with 2 sets of income…it can only be a positive thing.
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