Building a granny flat to produce income while travelling
chooknphil said
06:59 PM Dec 3, 2013
Has anyone in Perth built a granny flat & then rented out both thier home & the granny flat to produce an income stream while travelling?
Pro's & Cons please.
Also we are still trying to find out the Tax implications as we have lived in our home now 23 years....this is pre planning for self funded retirement - working until I turn 60, so need to produce income stream for a further 6.5 years.
Anyone been through this before?
Gerty Dancer said
07:19 PM Dec 3, 2013
First, check the regulations regarding Granny flats/Dual occupancy, ChooknPhil.... we found we couldn't do it, even though a neighbour did, just a couple of years earlier. They change the rules!
Bryan said
11:32 AM Dec 4, 2013
We looked at building a granny flat at our son's place so that we could have a home but at the same time no worries regarding security etc when we decide to hit the road. Regs are OK in Perth, you are now allowed to build a granny flat for rental to non family members. We approached a few companies and eventually decided against it.
-- Edited by Bryan on Wednesday 4th of December 2013 11:36:05 AM
Kantiki said
11:32 AM Dec 4, 2013
We are currently negotiating with council and builder re a dual occupancy. We plan to sell our current home which is too big and hopefully build 2 smaller homes, one as a rental. We tried a similar project 2 yrs ago but council changed the LEP in the middle of things and suddenly the land wasn't big enough. We then lost a bit of money on the whole thing. This time we will have pre approval from council (already done) before buying the block. Now we just have to confirm plans with builder and then apply for the DA which is approved for 5 years. We then have this time to sell our home for what we hope is a good price and then build. We know costs will go up but at least council can't change their mind again. We have built 5 houses with the same builder so he treats us very well and we are confident we can do this.
What I meant to say was that this started with the thought of building a granny flat with my meagre super payout but after doing our sums,we think this will give a better return and uses the equity in our current home.
My advice is think outside the box, do your sums very carefully and confirm as many details as you can before spending any of your hard earned cash. Consult with professionals in all aspects and get things in writing.
Good luck with your plans and I hope you enjoy the project as much as I do.
johnq said
06:26 PM Dec 4, 2013
It is a very sobering experience to go along to a meeting of the Property Owners Association (POA) in your State. Very few 'investors' in residential property are up to date and realistic about all risks and outgoings. The expectations of 'investors' seem to be rooted in the hey-day of 10% returns (probably fictitious marketing of the white shoe brigade) of sixty years ago.
It is not a set-and-forget investment. The young female property managers, chosen for their 'presentation' think nothing of calling tradesmen at all hours. The regulations and tribunals encourage tenants to be very demanding and never to raise a finger. 'Fair wear and tear' is now very broad. Be sure to factor in all of the management fees - they come off your gross.
However it is prudent to join the POA if going ahead anyway. The regulations are complicated, sometimes counter-intuitive in effect and are continually being re-jigged.
Has anyone in Perth built a granny flat & then rented out both thier home & the granny flat to produce an income stream while travelling?
Pro's & Cons please.
Also we are still trying to find out the Tax implications as we have lived in our home now 23 years....this is pre planning for self funded retirement - working until I turn 60, so need to produce income stream for a further 6.5 years.
Anyone been through this before?
We looked at building a granny flat at our son's place so that we could have a home but at the same time no worries regarding security etc when we decide to hit the road. Regs are OK in Perth, you are now allowed to build a granny flat for rental to non family members. We approached a few companies and eventually decided against it.
-- Edited by Bryan on Wednesday 4th of December 2013 11:36:05 AM
What I meant to say was that this started with the thought of building a granny flat with my meagre super payout but after doing our sums,we think this will give a better return and uses the equity in our current home.
My advice is think outside the box, do your sums very carefully and confirm as many details as you can before spending any of your hard earned cash. Consult with professionals in all aspects and get things in writing.
Good luck with your plans and I hope you enjoy the project as much as I do.
It is a very sobering experience to go along to a meeting of the Property Owners Association (POA) in your State. Very few 'investors' in residential property are up to date and realistic about all risks and outgoings. The expectations of 'investors' seem to be rooted in the hey-day of 10% returns (probably fictitious marketing of the white shoe brigade) of sixty years ago.
It is not a set-and-forget investment. The young female property managers, chosen for their 'presentation' think nothing of calling tradesmen at all hours. The regulations and tribunals encourage tenants to be very demanding and never to raise a finger. 'Fair wear and tear' is now very broad. Be sure to factor in all of the management fees - they come off your gross.
However it is prudent to join the POA if going ahead anyway. The regulations are complicated, sometimes counter-intuitive in effect and are continually being re-jigged.
http://www.poaa.asn.au/
It is a people management business that requires constant attention, it is not a 'property investment' business.