Granny Flats as a Source of Income
If you’ve got property with surplus land that isn’t in use and you’re tired of tending to it, you should consider if granny flats could be a suitable strategy. Many Aussies don’t realise that they could generate extra income by renting out these small flats – right from their back yard. Or even better, from the back yard of their existing rental properties.
Let’s take a look at some of the benefits of granny flats;
- Renting Them
Renting your granny flat may help with your retirement strategy, or to build additional income streams. Let’s suppose that you’ve got 3 or 4 properties, with room on each for granny flats. After you’ve built them, you can market them as rentals and have two income streams from one property.
The great thing with the construction of granny flats is that it doesn’t cost anywhere near as much as building a house would, due to their size and the fact that you already have the land – so it could be a much more cost-effective way to build on your rental income and create wealth.
- Use Them for Business
Generally, those who have their own business would have to pay a great deal of money just to rent a place for their business; however, that granny flat can become your place of business. Open your office there, and the money that you would normally pay on rent will go straight into your pocket.
Another convenient option would be to transform the granny flat into a place of leisure – one that won’t keep you there every second of the day. Transform it, for instance, into a gym, or a sauna. It will take some money in the beginning, but once you’ll see the cash from the customers rolling, you’ll realise it was a worthy investment.
- Adding Value to Your Property
A house with a granny flat may sell for more than a house without given the extra value and would appeal to investors looking to maximise their income. Be mindful of the area and style, granny flats don’t always add the same value that was spent on them, as someone looking for a home to live in might not be willing to pay extra for a granny flat they won’t use. That being said, if it’s in an area where granny flats are common, near a large university where students need a place to live, or a young family looking for a home where they have their retired parents living with them, then it could return a great result.
The Bottom Line
Granny flats have become popular as sources of income and all signs point out that this property strategy does work indeed.
Instead of mowing that lawn you don’t use and paying other people to take care of it, you could transform it into a passive income that may allow you to achieve your retirement goals sooner.
The legislation on building granny flats is a bit confusing, so you should talk to a a registered builder before you start the constructions.
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