If it feels like granny flats are popping up everywhere in south-west Sydney, you’re not imagining it.
Granny flats have seen a remarkable surge, propelled by rising living costs, heightened demand for rental properties, and escalating housing prices. But, what are the actual advantages of buying a home with a granny flat or with the potential to develop one?
We spoke with Lance Kirby, the Managing Director of home builder LTK Homes to take a deep dive into the world of granny flats and the unique advantages they offer.
An alternative revenue stream
LTK Homes has seen a considerable increase in enquiries for granny flats in the past year. The reason? People are seeking additional income streams to offset the rising cost of living. “Granny flats are popular with investors because they have the potential to provide an additional income stream without having to buy another property and pay more stamp duty, and in many cases, it’s positively geared from day one,” he says.
However, he was quick to point out that granny flats aren’t just for investors looking to maximize their property income. They also cater to those considering downsizing, such as elderly individuals or single parents, who may choose to live in the granny flat while leasing out the main house.
Facilitating multi-generational living
Granny flats offer the ideal solution for families looking to accommodate their ageing parents or adult children, who may be struggling to save a deposit. “It allows families to live together while maintaining their independence and privacy,” Lance says.
Affordable, quality living spaces
The rental market is in overdrive, and there’s a real gap in high-quality, affordable rental properties. At Prudential Real Estate, this translates into swift leasing and low vacancy rates for our granny flat listings.
They’re versatile
Granny flats are for more than just grannies! They can serve many different purposes depending on your needs. For example, they could be a guest house, a teenage retreat, an artist’s studio, a gym, or even a home office.
Boosting property value
Properties boasting a granny flat, or with the potential for one, generally command higher resale values than their counterparts. Investing in a granny flat could result in a significant return should you decide to sell your property down the track.
How much does it cost to build a granny flat in NSW?
An entry-level one or two-bedroom granny flat typically costs between $180,000-$200,000. However, for a premium build that includes extra features like an alfresco area, you may need a larger budget of around $250,000.
How to find a property with granny flat potential
According to Lance, the Campbelltown region is teeming with properties primed for granny flat development, thanks to the prevalence of large building blocks and spacious backyards. Here’s what to look out for when scouting for a granny flat potential:
- A minimum land size of 450sqm
- A block relatively free of significant trees and vegetation over 6m, as these can complicate council approval
- A good-sized backyard with reasonable access
- Preferably, land sloping towards the road for effective drainage.
Given the explosion of interest in granny flats, finding and securing a property with one, or the potential for one, can be challenging. At Prudential, we pride ourselves on maintaining the most extensive rental portfolio in Sydney’s southwest, many of which include granny flats. Consequently, many landlords reach out to us when they sell. By getting in touch with one of our sales agents, you gain a second pair of eyes scanning the market, putting you on the front foot when your ideal property lands on the market.
Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au
Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
