There are many reasons for wanting to build a granny flat. These may include creating much needed space for your family, potentially boosting your property value or creating an additional income stream. Regardless of the reason, you’ll need to be sufficiently prepared before commencing a project of this nature.
Careful consideration should be given to some of the following major decisions when sourcing, building and financing a granny flat.
1. Viability
If you are looking to construct a granny flat to create an additional income stream you will need to consider the likely financial return. What is the demand for this type of accommodation within your area and the likely rental that could be obtained? What surplus will be available after financing, maintenance and other costs? Will you be managing the property yourself or will you require the assistance of a property manager?
2. Relevant approvals
Your granny flat will need to comply with:
- planning requirements as determined by your local council, and
- building and construction standards as set out by the Building Code of Australia and other relevant Australian standards.
To comply with the above, you may be required to obtain a survey plan, architectural and engineering drawings and any other relevant certifications.
Rules and regulations vary from state to state. Contact your local council for the rules and regulations that apply in your area.
3. Location and size
Consider if you have sufficient area within your existing property to construct a granny flat that will achieve your objectives.
As with building a home, consideration of light and space is important, as is the purpose of the granny flat. You may also need to consider privacy for you and your tenant during this process.
The maximum square area for a granny flat ranges from 60 to 90 square metres and can vary between councils.
4. Design option
Consider what you’d like to accomplish with the addition of a granny flat, your lifestyle requirements and budget to determine what designs may suit your block and available space.
During this step you may also want to consider if your objectives are able to be achieved with a prefabricated, modular or kit (like a flat pack) granny flat. If not you many need to have a plan specifically designed that will come at a higher cost.
5. Choose your supplier/builder
There are many options to consider, however you will generally start with the selection of a supplier who is able to provide the granny flat to meet your requirements.
Some of these providers have their own installers while others will require you to organise your own builder to construct the granny flat. Regardless, you will need to ensure they are utilising a qualified builder and are reliable. Check their builder’s licence number, ask for references, review their portfolio and arrange a visit to a completed granny flat if possible.
6. Seek quotes
It is always advisable to obtain more than one quotation to ensure you are getting value for your money. This will also assist in determining any exact costs involved.
Granny flats can cost anywhere between $70,000 and $200,000.
A granny flat kit including a slab, plumbing and electricity is estimated at $81,000 for a 38m² granny flat, $95,000 for a 50m² one and $120,000 for a 71m² granny flat.
7. Financing your build
If you need to borrow money to finance your granny flat investment, call the office and we will be able to assist you with determining your borrowing options, including:
- accessing a redraw facility
- construction loan, or
- home loan extension.
Your personal circumstances will determine the finance option most suited for the construction of your granny flat.
If you’ve made it to this stage, the fun and excitement can now begin with site clearing, ground works and physical construction of your new build.
As with any build or property purchase, thorough research, specialist building and finance advice is highly recommended to reduce stress and the feeling of being overwhelmed. This will ensure you make the right decision for your personal circumstances.