Forget images of wrinkled old women in even?wrinklier?stockings, offering slobbery kisses and endless cups of tea, nowadays thanks to?woman like Goldie Hawn,?Susan Sarandon?and Kris Jenner there?s plenty of glamour in being a grandmother.?And thanks to the increasing need for affordable housing, granny flats are also becoming a?hot item.??
Over the past few years, there has been a spike in the demand for granny flats on online accommodation websites. So,?whether?you rent yours out to a third-party or use it for the original purpose of housing a family member -?granny flats?offer a low-cost way to make the most of your property?assets.?
But before you rush out and plonk one in your back yard, as always, there are plenty of pros and cons to consider.?
Granny?Flat?Gains?
Keep them close
Having?your aging loved ones close at hand?gives?extra peace of mind, and offers them the sense of freedom missing in many age-care facilities. And, should you stick your teenager out in your granny flat, it?ticks?exactly the same?boxes,?by?giving them a sense of independence,?whilst keeping them?within handy nagging distance!?
Cost benefits
Retirement villages and aged-care facilities are not cheap, and the ongoing costs can quickly sap?even the most?generous?of nest?eggs.?In comparison, your average two-bedroom 60m/sq?granny flat costs around $120,000 which is a?fraction of the price of?sheltered care or?even the most basic investment property.?And?if?you decide to rent out your granny flat, in Sydney the?current average weekly rent is $346 which is not a bad return on your investment.?
Ease of consent
If you are looking to subdivide or make major renovations to your property, you can face a lot of red tape, but a few years ago?in NSW?the government?passed a new planning policy to help fast-track affordable housing.?As long as?your granny flat meets certain criteria,?you could see your plans approved in just a couple of weeks.??
Granny?Flat?Grumbles?
Loss of privacy
Unless you have a huge garden, building a granny flat in your backyard is going to compromise your sense of privacy and your property?s garden area. Of course, when you come to move home, this will?rule out any buyers looking for a garden,?and?limit your?market?to those seeking a house with a self-contained?flat.??
Rules?and regulations
In NSW,?the laws concerning the use of granny flats are?pretty relaxed, but in other parts of Australia they are a lot stricter. Although not enforced with a heavy hand, in VIC, QLD and SA, granny flats cannot be leased as?rental?properties. And even in those states that do permit it, you must not fall foul?of?local government regulations concerning parking and tenancy laws.??
Tax implications
As with every financial transaction in life, you need to think about taxes. If you are earning a rental return on the granny flat, there will be knock-on effects on your tax bill, some positive;?some negative. A main point is that by building on your existing property, when it comes to selling both dwellings?together, the capital gains tax you will pay on the rental unit will have a knock-on effect on your main dwelling.??
However, by talking to experts at every step?of the process ? your mortgage broker, lawyer, surveyors, planners?? building a granny flat?will help strengthen your family?s bonds ? and in the long-term boost its finances.??
Louisa Sanghera is a Finance Broker for Residential Mortgages, Vehicle and Asset Finance, Commercial Lending and Budgeting and Cashflow Coaching with Zippy Financial.
She has?gained more than 30 years in the Banking and Finance Industry, and since founding Zippy Financial, has become a multi award nominated expert in the field of finance featuring regularly in industry press and speaking at finance and investment seminars across the country.
Website: www.zippyfinancial.com.au?
Email: louisa@zippyfinancial.com.au
Phone: 1300 855 022