No, not yet. We’ve got good tenants in there now on a 12 month lease so will look at it in a year. From what I’m reading, yea it seems GC Council have a better/faster/easier system under the MCU (‘Material Change of Use’) provisions. On another point the Council rates are not so pretty :)
I too have a property on the Gold Coast (Isle of Capri) and am looking at an attached ‘granny flat’ on the upper level.
Gold Coast Council do allow a secondary dwelling to be created and they call it an ‘MCU’ which means a’Material Change of Use’ application under their development policy. Their policies are actually quite supportive of these types of extensions and conversions BUT they make it very clear that you cannot separately rent-out a granny flat in the Gold Coast Municipality.
This may change in the future, particularity as neighboring Councils in Ipswich and recently, Logan have allowed granny fats to be rented out to randoms.
Gold Coast Council have a fast-track system which many Sydney Council’s would be wise to duplicate but that’s another story haha!
Serge.
This reply was modified 10 years, 6 months ago by Brazen.
I have looked into it a bit. The refrigerated ones seem to be the go, as they have good insulation. They cost more though. I could see them being used as granny flats in big back yards of existing rental properties. Or as a hobby off-the-grid project/cubby house/man cave for personal use.
I wonder if some second-hand ones could be gotten cheaply post-mining boom.
There are quite a few resources online about this.
Be careful of getting Council approvals for these types of buildings Andy. Many Councils go by the EP&A Act definition of a building which defines transportable and modular structures as not being buildings; thus they won’t approve them as granny flats. Just make sure you check with Council before hitting the ‘buy-it-now’ button.
The only buyers I could see wanting a GF would be investors, those with teenage/older children or older parents, or those looking to let out the GF for some cash on the side. There are many who just want one building on the property (i.e. they are a family and want the big backyard rather than another swelling).
I’m not sure I agree with this Richard.
I do around 250 granny flat approvals annually. I always stay in touch with my clients post-construction and they pretty much all get re-valuations. I’m yet to see an investor cry that the valuation fell short of the construction cost. Since 2009, the major banks are seeing granny flats (especially the NAB I’ve noticed) as a verifiable addition and separate income-earner for properties across NSW.
There is absolute merit in designing and siting granny flats so they they can be interchanged as either an investment earner but also as a family’s backyard cabin, teenage retreat or guest accommodation. It pains me when an investor buys a property which simply has bad separation and bad geometry. This I must agree is the destruction of a rear yard. It makes me cry- I simply refuse to do approvals on blocks which aren’t spatially ‘right’.
Most of my clients boast revaluations above the initial injection. yes, some of this is probably the growth of capital across NSW but it goes beyond that. My own case-study is a Panania NSW purchase in April 2013 for $580k, granny flat completed in August (cost was $105,000 incl. landscaping, fencing etc). Valuation in March, 2014 was $874,000. The suburb has grown in value by about $60,000 so the added bonus was around $110,000. I’ve actually had an offer for $870k recently but I rejected it. I don’t want to sell. In fact I want to do 3 more before I retire. I’m 46.
Point is, people aren’t complaining about valuations or resale. The fact is granny flats are effectively free <moderator: delete advertising>, and with an eternity of rental returns after it’s paid off (by the tenants) why on would you want to sell the property? I’ve got clients building their 7th granny flat in 5 years. It’s a bit of a frenzy out there, especially in Western Sydney.
Brazen.
This reply was modified 10 years, 6 months ago by Brazen.
Brazen are you still involved in GF Permits and construction? Thanks. Blueline.
Hi there Blueline,
Yea I’m still designing, approving and helping with building granny flats for my clients. The unique thing I offer is a ‘co-op’ for investors looking for the best-build-for-the-money. What does this mean?
It means having someone there on the inside looking after your investment goals and interests- an impartial advocate who has no commercial interest in your build. I reject scores of enquirers every week because I can see that a granny flat in their back yard(whilst legal) is going to absolutely destroy the privacy and resale vale of their land. Granted, they often go to a ‘commercial builder’ after I reject them but I’d rather that than an un-occupiable investment on my conscience, no?
On pricing, there are companies offering builds for $80k to $90k BUT they’re shoe-boxes; nothing more than a container or caravan-park cabin on stilts. Then there are companies building decent structures but they’ll sting you with ‘add-ons’ and they’re very top-heavy. These companies charge more just to pay their hefty media bills. You can also spot these businesses by the way they advertise (TV, Radio etc) and they’re lack of transparency on pricing. They boast extravagant advertising and they have sales-staff running all over Sydney offering people the Earth. There’s nothing wrong with advertising of course but for granny flats, which are small developments, there’s not a huge margin for a well-priced builder. Bottom line is this – is your money paying for quality inclusions or for fancy advertising? Something’s gotta give, right? So these larger builders are gambling on the razzle-dazzle of and promises of investment returns etc but we all know this stuff already. We’re property investors!
A little-known fact is that really good builders don’t really need to advertise much at all. I’ll say that again – really good builders don’t need to run TV Ads and hire scores of monkeys to convince people to buy from them. .
The best builders are relatively small operators with just a few staff at most, who just build a granny flat or two at a time. The Builder is physically there on site, not off smiling at cameras.
My own goal (and it gives me great pleasure) is to search out these humble, hard-working builders who are family-run and don’t have unrealistic ambitions. It’s these bigger project companies that lack quality control and rob you of inclusions – to pay for advertising and huge overheads. A business gets to a point where a lot of your money just goes to running their own admin; and they charge you an arm and a leg for the privilege.
I’ve been involved in residential drafting and building approvals for decades and I’ve seen building companies emerge, grow out of control, lose touch with their customers and (whilst the founder gets filthy rich), their quality suffers.
At the end of the day, you’re after the best build for your money are you not? You’re not after a ‘sales experience’. So look for builders who are small, not greedy and who will be there on site day in, day out. When you look at their finished work, look very closely, not with rose-coloured glasses. Look a the joinery work, where the architraves meet. Look at the paint in direct sunlight. Look under the skirtings for gaps and paint runs etc. Look at everything closely and with a critical eye.
I hope this helps!
Serge.
This reply was modified 10 years, 6 months ago by Brazen.
This reply was modified 10 years, 6 months ago by Brazen.
This reply was modified 10 years, 6 months ago by Brazen.
This reply was modified 10 years, 6 months ago by Brazen.
Scary public liability scenario. But my experience with Councils is that they say they are prevented by regulations from approving any structure afterwards or “ex post facto” as they told me. Has this changed and can you get approval afterwards these days ?
Cheers
thecrest
Yes, you can indeed get approval for a ‘Granny Flat Conversion’ post-construction (ex post facto) and this is achievable under the NSW State legislation in many cases. This rule hasn’t exactly changed but it’s a little known fact that you can do it despite even the legislated nominal setback prescriptions. I have a lovely email from the NSW Department of Planning which I often pull out to show people that you can indeed achieve a granny flat approval – even after the structure has been built; or it’s currently a garage or shed which is being (naughtily) occupied on the day of reckoning.
As stated above and to elaborate, the adjoining two dwellings need to be set far forward and your main dwelling (naturally) must be set way back. This will allow room for the granny flat in front of it, too. Pretty rare parameters but it does happen!
The other scenario is where there are no other dwellings within 40 metres of your lot and your main house just happens to have been built far back on the block. Example: Your main house is (say) 12 m from the front boundary- the SEPP allows a setback of 4.5 metres, for a property which is 450 sq m to 900 sq m site area. I’ve only achieved this once which was on a rural lot (Orange NSW).
You can certainly fit 2 bedrooms into a 45 sq m granny flat (as a minimum) bit it does get a bit tight to be honest. Some tenants prefer bigger (or more) granny flat bedrooms whilst others want more living and dining space. The reality is that, for rental advertising, two bedrooms sounds better than just one. That is, it will get more rent as a 2 bedroom structure.
Some Sydney Councils allow granny flats at 65 square meters under their own DCP (Development Control Policy). Even under the current NSW State Legislation, you can attach ancillary structures like sheds, patios, carports, garages and verandas. Have a read of this guide which explains what is allowed: http://www.grannyflatapprovals.com.au/larger-than-60-square-metres
Great, except lock-up stage is abut 25% of a build and you're not including granny flat approval, site costs, connection to services and all of the internal works?
How is that in any way a realistic build rate?
You might as well say we do it for free- except you need to pay for the entire supply, design, approval and build.
A granny flat is certainly a good income strategy for most people. The important thing is to plan the build so that it's attractive to the tenant. This means maximizing separation and privacy! Check out this guide on how to achieve this: http://www.grannyflatapprovals.com.au/granny-flats-privacy-separation
It's a really good idea to speak with your accountant about this.
He'll probably advise you to borrow the money for the build because:
1. The interest is tax deductible
2. The valuation will be less than the cash you'll spend.
It's often better (for tax purposes) to let both dwellings out but you will be up for CGT when/if you plan to sell.
Most of my investors have a 'hold' strategy, where they don't plan to sell in their lifetime. They're going for volume (4- properties+) for a long-term retirement strategy.
Yea I do probably 50% of granny flat approvals in the western Sydney region. Next would be south and south western Sydney (Campbelltown etc). I think the prices quoted in the article were quite high? Modular homes are not able to be approved as granny flats under the SEPP, so this article is flawed. Here's the Department of Planning circular on the fact that modular and transportable homes are not dwellings.
I'm pretty sure that unit you linked is not BCA compliant for a habitable dwelling. Remember that granny flats must meet BASIX (energy efficiency) regulations too.
This means:
1. R 3.0 insulation to walls and roof plus R1.5 to sub-floor. This will vary depending on region.
2. 2.4 metre internal wall heights. If it's a cathedral ceiling it must have an 'average' wall height of 2.4 m.
3. The backyard cabin (granny flat) must have a BASIX compliant hot water system, a rainwater tank and insulation.
There are of course other building code requirements but just be aware that a granny flat is effectively a new house. It must be built as a new house.