Hi guys,
I've just purchased a house for $215,000.
It needs a little work. Probably only about $5000 worth.
Then I'm going to put a 2 bedroom granny flat on the block as well. This works as it's a corner block.
The granny flat will be about 65sm. It will be a kit home and will cost me about $60,000 to assemble.
The house will rent for 300 and the granny flat about 250 a week.
In about 3 months I'm hoping to get the house revalued so I can pull my money out and go again.
How do you think the bank will value the granny flat? If the granny flat cost me $60,000, will the bank add $60,000 to the homes value?
So say $240,000 for the renovated home+ 60,000 for the granny or will they calculate another way. Maybe based on yield.
Richard, Jamie, QLD007 and co, I'd really appreciate your thoughts.
Cheers
Naremburn
Hi N, check this link out if your in NSW. Interesting reading under the NSW State Gov Affordable Housing scheme. Local Councils cant argue the toss as long as you comply. Granny flats are limited to 60sqm though.
http://www.planning.nsw.gov.au/LinkClick.aspx?fileticket=vldAEayqCeY%3d&tabid=313&language=en-AU
Whats ur Current LVR??
TO be honest 3 month is not enough time for a house to gain enough in equity…Regarding the granny flat valuation, no the bank/valuer will not just ADD the construction cost on top; remember your applying for a equity release not a construction loan ( loan amount is to small for construction loan) …However some banks ( Normally the credit union and smaller banks) if your LVR is under 85% will allow the valuer to take “in consideration” that you will have a granny flat and compare it’s “selling” price to the market ie Another house in the same suburb with granny.
So it will depend on your LVR and which Bank.
Regards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
Thanks shape. I’ll be using 120,000 from a loc to fund the 20 per cent deposit and the closing costs plus the granny flat. So once the granny flat is constructed I’ll have 120,000 of my own cash in the deal. I’ll have a stand alone loan for 172,000 on the house. That’s why I’ll need a revaluation. So say it comes back at 290,000 with the granny I can go to 95 per cent lvr and get most of my money out. So I’m basically wondering how much value the granny will add in relation to it’s cost?
Naremburn123 wrote:Thanks shape. I’ll be using 120,000 from a loc to fund the 20 per cent deposit and the closing costs plus the granny flat. So once the granny flat is constructed I’ll have 120,000 of my own cash in the deal. I’ll have a stand alone loan for 172,000 on the house. That’s why I’ll need a revaluation. So say it comes back at 290,000 with the granny I can go to 95 per cent lvr and get most of my money out. So I’m basically wondering how much value the granny will add in relation to it’s cost?Will need to ask a valuer that question.
Bank valuers are a werid mob-in some places/location granny made no difference 0.o – i think it was in TAS ( 7120?? something like that) the valuer declared granny was not in demand in the area + made no diff in market price.
And then you get the common areas like Liverpool, Blacktown and Granville NSW….Epping in VIC etc where the valuer would push the value up slightlyBut the point is, you can request for the valuer and bank to add in “potential” value of a granny to the property.
If you want to know how much, you could go on RP data, price finder or Domai.com.au ( past sales) and do some price search on simliar houses with grannyRegards
MichaelMick C | Shape Home Loans
http://www.shapehomeloans.com.au/
Email Me | Phone MeSame Banks. Better Rates. Served With a Passion.
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