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Granny Flats, are they a good idea?

As demand for housing grows, property investors are coming up with more creative ways to maximise their income. Granny flats are just one option. These versatile little buildings are growing in popularity, and here are three reasons why.

Increase your earnings

Adding a granny flat to your existing rental property could earn you a lot more a lot more income, and potentially add a lot of value to your investment property. Not only can you have two potential sources of revenue from a single plot of land, but if one tenant leaves then you'll have another stream to see you through. The extra income might even turn your negatively geared property into a positively geared one

However, it's important that you do your research. Think about whether it is suitable for your type of property or the surrounding area. What works in one suburb might not give you an advantage in another. Some people might also be put off by the close proximity to other houses, so it could take longer to find a tenant

It's affordable

Building a granny flat on your property can be a relatively cheap process, and can often take lot less time to construct when compared to building a conventional home. Consider options like flat pack houses, which are pre-fabricated structures that just need to be assembled on site. One Australian firm even specialises in these quick-build homes!

But consider the steps you'll need to take and the costs you'll incur to get the land ready for construction, and to meet all the laws and regulations stipulating how a granny flat is used and built.

Multipurpose

Many tenants actually prefer granny flats. Not only do they generally have access to a backyard, but unless you want to go through the process of separate metering, utility costs are often included in the rent price. These buildings can also accommodate a number of uses, in case you want to take a break from renting it out. They can simply be a separate guest house or space for elderly parents, but also a home office, workshop, or even extra living space for any teenage children - that way, the building can 'grow' with you and your family.

Remember that while a granny flat might seem like a quirky idea now, There is an array of things to discuss before you build.