There are ways to improve flexibility, add value and generate income from your home, including a garden flat addition, says Richard Sheppard.
Sydney’s Northern Beaches have long been a fantastic location to invest in property and to incorporate additions such as a garden flat. However, with the recent streamlining of the council approval process of secondary dwelling additions by the NSW Government and the improved affordability of such building options, it’s now an even more attractive option.
Secondary dwellings are generally considered to be detached buildings (such as garden flats) but also include attached separate living spaces under the same roof as the main building, or an extension. There are some general conditions that need to be met, such as a maximum internal floor space of 60 square metres, and others that are outlined in the information brochure at www.planning.nsw.gov.au. We strongly recommend speaking with an expert in the field who can guide you through these conditions.
If you have adequate spare room in your existing home to renovate and create a separate living space (and you are happy to sacrifice that space), then it’s well worth considering as it could cost as little as $20,000. If you have sufficient space to build in your backyard, good to very high-quality one to two bedroom garden flats can be built for between $50,000 and $150,000 inclusive of all design, certification and landscaping costs.
It’s possible to achieve rents of up to $500 per week for a well-designed garden flat in a good location, so it’s worth considering as it could help you pay off your home loan in around half the time. Alternatively, the extra income could help start or support other investments such as an investment property portfolio. In turn, this could also help you pay off your home loan sooner or see you on your way to an early retirement.
Paul Mathias of Multidwell says having less lawn to mow, and rent to collect from a garden flat is like planting a money tree. “What a great way to add value to your property, and with an income stream attached. You may want to do it for the family. The concept has huge advantages for the self-funded retirees, empty-nesters and investors to increase their yield,’’ he says.
These comments are echoed by Chris Smith of Greenwood Garden Products who explains, “With the ever-increasing price of rent and extremely low availability of rental properties, a garden flat is an excellent option as a source of revenue. Rentals can bring in an extra $500 a week from your own backyard.”
Some other tips to further increase returns include:
- Consider offering off-street parking for higher rent
- Consider furnishing the property
- Use efficient design to increase from one to two bedrooms plus deck or courtyard
- Consider renting a spare room to students or others
Property investing can be a very rewarding experience if executed well and with good advice, so if you’d like any assistance with these concepts or any other property investment needs, we’d be glad to show how we can help.
Richard Sheppard is the Managing Director of inSynergy Property and Finance Solutions. inSynergy provides professional property investment advice, property market research, specialised mortgage broking services and is an accredited investment property buyers’ agent. Visit www.insynergy.net.au or phone 1300 308 808.