All Topics / Value Adding / Value Adding – Grany Flats

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  • Profile photo of BondsBonds
    Join Date: 2008
    Post Count: 2

    This is my first post on this forum and hoping to get some good advice from anyone who can offer it. Basically I am trying to learn how to add value to a property which will bring back a greater rental return, eg a friend of mine was looking at a property and thinking of converting the garage to a granny flat. Without getting into too much detail I wanted to know if this was possible, and what are the steps needed to get this done. I have a couple of questions that I’ve listed below that I can think of that I’m hoping someone might be able to answer and also add too.

    • is there a minimum size for a granny flat, eg a single converted garage?
    • would the granny flat need a separate street address, eg 100a street?
    • how hard is it getting council approval?
    • Do you need council approval if it’s under a certain budget?
    • is it expensive to extend water pipes?

    Its abit of a long shot but Steve McKnight talks about this stuff all the time so I’m sure there’s a way out there. 


    Profile photo of newbi2newbi2
    Join Date: 2008
    Post Count: 227

    first stop is the council, they will tell you if you can and then run through all the thinngs you will nedd to consider. Then cost it out and see if the numbers work. It is a lot more involved if it is a rental preoperty and not just a teenage retreat for you eldest. What I am getting at is although it may be OK  to compromise if YOU want to sleep in it, that wont cut it for a rental (eg smoke alarms, fire safety etc)


    Profile photo of DaedalusDaedalus
    Join Date: 2007
    Post Count: 140

    I've heard of dual occupancies being put through as granny flats, where the full dual occ wasn't permitted, but a granny flat was.

    The other thing to consider is your target market. I have an IP with a granny flat, and at first I thought that I could get 2 independent tenants in. The problem with this is those most people don't want a stranger living in their backyard – unless they own the place and the stranger is their tenant.

    So my target market became a family with enough people to fill 3 BRs AND a granny flat. Not impossible.

    In the end, my tenant is not such a family, but one who really just wanted to live right there, and was willing to pay the extra rent I wanted because the granny flat was there. Having said that, the extra is nowhere near my initial hopeful projections when I thought I might get 2 independents in there…


    Profile photo of BanjoSmythBanjoSmyth
    Join Date: 2007
    Post Count: 44

    Hi Bonds

     I think Daedalus makes a reasonable point.  If you were thinking of doing some improvements to increase the overall value of the property that is great but it might be a little more difficult when trying to rent out the granny flat.  Assuming that you can get permission etc you would have to ask yourself two questions

    1.  Would you like to live in this property (granny flat)?
    2.  If you were living in the main house would you like someone living in the granny flat?

    If its a great space and you answer yes to the above questions then its a great idea!  If you are converting a garage then i think you would probably be looking for tenants that wanted an unattached room eg. a family with a teenage child, which is no drama.

    Best of luck


    Banjo Smyth

    Profile photo of craigsedcraigsed
    Join Date: 2004
    Post Count: 37

    Hey Bonds,

    I have been looking at quite a few properties recently, both with existing granny flats and with possible conversions. The suburbs I am looking in (western Sydney) are desperate for rentals and granny flats do very well and are easily rented. Here are a few issues for you to consider (can only speak for the Penrith council areas I am looking at):

    – seperate water and power meter? Easier to manage if you have them. Cost not that great, but will need to be council approved to get the seperate power meter. That will require a seperate address for the granny.

    – many granny flats out there being rented out that are not council approved. That means no insurance. That means if something goes (horribly) wrong you could lose your shirt.

    – council approval is required for a granny and it needs to meet same requirements as any other dual occ. This means many of the non-approved grannys I have seen would not get council approved – maybe block not large enough or driveway access not wide enough………

    – granny will need to have appropriate bathroom/laundry/kitchen facilities. Even when keeping things very basic if you are building from scratch or converting a garage I would imagine keeping it under 10k would be tricky. Probably much better looking for properties with existing council approved grannys or with grannys that you know would get past council.

    Good luck,

    Profile photo of BondsBonds
    Join Date: 2008
    Post Count: 2

    Thanks everyone for your advice and i've taken it all onboard.

    Craig I think were on the same track and looking in the same areas, my end goal (probably everyones in this market) is to purchase properties that have potiential to pay off themselves, and sit back and wait even if it takes 10 years + to double.

    Thanks again and i'll keep add to this post once i get more expierence.


    Profile photo of AAZAAZ
    Join Date: 2008
    Post Count: 56

    Each local authority has different requirements regarding granny flats. Most Councils now have their planning codes on their websites and if you can’t find the answers there then I would speak with their Senior Town Planner in person.

    Adrian and Amber

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