Housing is critically needed and granny flats are one way to boost supply. Homeowners can utilise their existing land to build a granny flat and generate a strong rental return. Many factors in the current property market make this a sound investment opportunity, as rental vacancy rates and housing stock levels remain low.
“Using your own land is a solution, with multiple uses available including multigenerational living, studio or office space, teenager retreat or Airbnb style accommodation and so on. With changes to the R code, there is no minimum lot size requirement for a granny flat and this opens up your options,” said Summit Homes Granny Flats General Manager Adrian Sutton.
“About 50% of our clients are investors looking to generate a rental income and the rest are looking to house family members be it a relative, parents or a child.”
As a result of the changes made last year, granny flats can also be incorporated into duplex, triplex or other grouped developments subject to site coverage and setback rules but there is no longer a lot size restriction providing an additional opportunity to boost rental return. Technically any single house or grouped dwelling can accommodate a fully detached granny flat in the rear yard, however, these can not be separately titled. This means that granny flats can be accommodated on a greater number of properties.
The changes also permitted a 70sqm floor area limit which does not include the area to the walls. This adds approximately 6sqm to the size of the dwelling facilitating a larger floor area or additional rooms than what was previously permitted before changes to the Codes.
“We can build granny flats as small as 50sqm although the majority of granny flats we build are 70sqm. And these are essentially smaller scale homes built to the same quality and finish as our larger homes; we use the same fixtures and finishes, same appliances. Clients are impressed when they walk through our display granny flat because it feels just like a normal home,” Mr Sutton added.
Generally, clients have an idea of what they are looking for and the layout is selected based on the lifestyle they are trying to accommodate. For example, a teenager compared with someone who is elderly. It is not uncommon for parents to build a granny flat for them to move into while their children occupy the main house. This is a trend Summit Granny Flats are seeing more and more given how hard it has become for young people to enter the property market.
“Our most popular granny flat option is about $250K. The rental yield is quite high, approximately $550 per week depending on the location making a granny flat a very good investment. With the addition of fencing to increase privacy and a separate driveway or carport, Granny Flats are a smart way to provide housing to the current market especially given how low the rental vacancy rate is.”
“Lots of clients use their equity position to build a granny flat and then rent it out. You have more control over a dwelling in your own yard which is appealing for our investor clients,” Mr Sutton added.
“Fully framed granny flats can be completed in 6 months which gets the product on the ground in a short space of time, and our clients can start earning rental income very quickly, this is backed by our 6 month build guarantee for fully framed granny flat builds” said Mr Sutton.
“Following the update to state legislation around the construction of granny flats, as a business we looked at ways to build granny flats much faster with uncompromised quality. We offer clients the option of using fully framed construction with Truecore Steel and Masterwall instead of traditional double brick to give us that 50% reduction. We still offer traditional double brick if that is something that the client prefers,” said Mr Sutton.
With ongoing challenges in the building industry, including supply chain disruptions and labour shortages, Summit Homes recognises the uncertainties customers face during construction. Summit Homes Group is dedicated to minimising these impacts and ensuring homes are completed on time. The Build Time Guarantee offers customers peace of mind, knowing that the construction of their granny flat will not exceed 130 working days (approximately 6 months) from the date of slab down to the practical completion, if they select the fully framed construction option instead of double brick.
