Top Tips for Investing in Granny Flats

English: Broomfield Oast On Heath Road. Curren...

Spare Room/Granny Flat. (Photo credit: Wikipedia)

Are you living on a large property and would like to earn some extra income by renting out part of it? A Granny House is a great option for creating an income earning rental property. This works well because the space is separate from the main housing, which provides privacy for the tenant(s). When done properly, a Granny Flat can be a nice little place to call home.

Maybe you want to rent it out to a college student, or a young couple who needs a place to live while they look for a place of their own. Whether temporary or more permanent, you do need to make sure that your rental space meets certain requirements. In 2009, the NSW Government released a policy, the Affordable Housing State Environment Planning Policy, which lays out all of the guidelines for building a Flat on your property. It is important that you adhere to these guidelines, which include:

  • Residential homeowners can build a Granny Flat if their property is 450m2 or larger
  • It has a maximum floor area of 60m2
  • There must be a 24m2 courtyard space, at least 4m wide
  • An access handle of at least 3m wide is required for battle-Axe blocks

These are just a few of the requirements. You will need to check with your local council to obtain a Section 149 (part 2) Planning Certificate and arrange a site investigation on the property. There is no requirement, however, for homeowners to obtain Council approval, as long as your application meets the minimum Complying development requirements.

You can create a great rental property with a Granny House by creating a space that is easily accessible, offers a convenient & comfortable layout, and offers necessary features like a kitchen and bathroom. You want your Granny house to be a smaller version of your home, so that any renters will feel comfortable living there. Part of what will make your rental property comfortable is building it so that the dimensions are not uneven. In other words, you don’t want an extra large bedroom with a really small bathroom. The space needs to be accommodating to any lifestyle, since a rental property often houses multiple tenants over a period of time.

One thing to consider when designing your Flat is your own preferences- to an extent. Think about what you would want in the space if you had to live there. A few questions to ask are:

Do I feel like I have privacy?
Do I have all of the basic features/amenities that I will need?
Do I feel like I have an open space?
Do I have adequate storage for my belongings?
Would I feel comfortable having guests over?

There are many question to ask yourself when building a Granny house. We recommend doing research online, and then approaching companies with the new found knowledge you have gained. There are a huge number of granny flat designs to choose from as well as package which will keep the cost down.

If your Flat is a place that you would be happy living, then you can feel confident that a renter would be happy living there. Even though the property is technically yours, you want to make sure that whoever lives in it feels right at home.

Erin Emanuel