Why Are Houses with Granny Flats More Valuable

1. Why Are Houses with Granny Flats More Valuable? The well-being of your family will largely be influenced by the property you invested in. Your home is your pride and joy, but unfortunately, for many Aussie couples, the possibility of moving to a more spacious dwelling remains a distant dream. Is the house you live in sufficient for your essential needs and those of your significant other? That’s great. However, over time, you will most likely need more space. Are you planning to expand your family? Are you waiting for the birth of your child and need extra space for your activities? If so, you will have a choice: either you try to navigate the ever- changing real estate market of NSW, or you utilise the professional services of home builders in Sydney, specialising in the construction of ADUs. An ADU can represent a practical and cost-effective construction that will increase the square footage of your dwelling, provide the extra space required for your activities, or act as a rental that brings a steady and predictable cash flow. What Are the Principal Financial Benefits of Granny Flats? Firstly, houses with granny flats are priced about 25-30% higher than properties without ADUs. Why is that? A couple of reasons. The rising popularity of granny flats is a natural consequence of the housing shortage affecting major Australian cities. Sydney, for example, has recorded an annual median population increase of about 1.25% for several years. However, the housing market, at least until now, has not been able to keep pace. More people are looking for affordable properties than there are dwellings available on the real estate market. So, naturally, prices have gone up exponentially and problematically. In Sydney, the median price of purchased buildings has surpassed $1.6 million, a value that’s unsustainable for most Aussie couples or families. So, alternative housing solutions like accessory dwelling units have become popular. Granny flats cost, on average, around $130,000

2. to build, and that’s for a two-bedroom unit. They are not exactly cheap, but at the same time, they are significantly more affordable than trying to move dwellings. Plus, since the demand for affordable housing is so high, finding tenants should be a breeze. In NSW’s capital, the average vacancy rate just three years ago was 3.5%. However, nowadays, that figure stands at 1.1%. Do you have an ADU ready to rent, and are you prepared to set a weekly lease below the NSW average? In that case, you can expect an occupancy rate for your ADU of over 95%. Houses with granny flats go for 30% more on the real estate market because they have more square footage, and the ADUs can generate tens of thousands of dollars in rental income each year. You Can Do the Math Let’s say you are the owner of a dwelling in NSW worth approximately $1.3 million, so $300,000 less than the average for your residential area. If you invest $130,000 in a two- bedroom ADU, and that adds a 30% increase to the real estate value of your property, then you can expect to sell it in the near future for around $1.69 million. When deducting the initial price of the ADU, your investment will bring you a nearly guaranteed net profit of $260,000. Plus, it would be best if you also considered the ongoing rental income. In NSW’s capital, the weekly rent for market-available properties has reached $750. Let’s say you want to undercut this price and rent out your ADU for $680, and you achieve an annual occupancy rate for your unit of 95%. This will translate into around $33,600 annually in net profit. So, in four years, you could cover the construction costs of the ADU. When built by home builders in Sydney, houses with granny flats are an excellent investment and more profitable than any type of real estate endeavour available to Aussie families. What Are the Conditions for Building a Granny Flat? In NSW, the construction of ADUs involves a streamlined process that can be navigated easily as long as you use the services of home builders. What are the eligibility requirements for an ADU? For one thing, your property must be zoned for residential use. Secondary dwellings are

3. permitted in Zone R1 parcels, intended for general residential development, R2 zones for low- density residential planning as well as R3, R4, and R5 lots. However, for the latter, approval will only be possible if you apply for a DA. Moreover, granny flats can only be built on land where there is a primary dwelling. Are you considering building the ADU before constructing your primary home? Unfortunately, that will not be possible. Plus, your property’s lot size must be larger than 450 square metres and boast a minimum of twelve meters of street frontage. Granny flats typically can’t have a floor plan that exceeds 60 square metres, they can’t be taller than 8.5 meters, and they must benefit from a courtyard space of at least 24 square metres. As for the application process, you have two options. You can either go for the traditional route and apply for a Development Application, or you can accelerate the approval process by opting for a Complying Development Certificate. CDCs are the preferred method by most granny flat builders as they don’t require council approval, and they combine the planning and construction approval in one step. However, some supplementary paperwork will still be necessary. The ADU builders you engage will handle the completion of your BASIX certificate and the construction’s structural engineering and architectural plans. Plus, typically, you will be required to present a home insurance policy. One of Your Best Ideas Houses with granny flats are all the rage right now, and for good reasons. On average, an ADU can add over 30% to the real estate market value of listed properties. Plus, since they can be rented out for significant profits, granny flats are considered one of the safest real estate investments accessible to typical Aussie families. Sure, they are not exactly cheap. But, they are significantly more affordable than constructing a new primary dwelling, and the paperwork required to start construction, at least in NSW, is simplified. Do you need extra space for your creative ideas? If so, a granny flat should be at the top of your priorities list. Are you looking to increase the overall market value of your property, make your dwelling more attractive to buyers, and potentially obtain a sustainable secondary income that complements your family’s financial needs? In that case, an ADU will be an excellent plan. Houses with granny flats are more than just simple buildings. They can be a ticket to financial profitability and, with the help of home builders, act as a showcase for your creative vision.