Granny Flats

A granny flat is a self-contained small residential building located on the same block as a single-family dwelling, often used for an ageing family member, hence the term.

Cultural shifts in Australia over recent decades have made building a granny flat very popular across Australia for a variety of reasons. We see children returning home or choosing to stay at home into their thirties whilst enjoying living in their own space; it also provides the opportunity to purpose build a home for family members with disabilities. It provides that sense of privacy and independence required, whilst keeping a family together. Accessibility and safety considerations are real needs, whether that involves raising or lowering benches, specific location of switches, safe flooring, and tiles and more.

Building a granny flat is an affordable way to own an investment property. Compared to a separate investment property, a granny flat is easier to maintain and look after given its proximity to the property’s primary dwelling.

Like any well-executed home upgrade, adding a granny flat also boosts re-sale value, thanks to reliable rental income, which also appeals to investors. With a two-bedroom granny flat in parts of Sydney yielding up to $800 per week in rental income, the attraction is self-evident. If for example, you are sitting on a property worth $1 million or more and have a low Superannuation balance; adding a quality custom-built granny flat should be given serious consideration.

Granny flats are also often used as holiday rental properties.

They can be custom-built, prefabricated, transportable or even flat packed.

A kit home is perfect for owner builders looking to create a bespoke home at a much-reduced cost. Bear in mind though that construction is not possible without the various experts who help along the way. One becomes the financial auditor, labourer, technician, and project manager; all at the same time.

For those less capable, some kit homes are built off-site in builders’ warehouses and delivered to the block of land. The benefit of these transportable homes is that you get a home faster with so much less hassle.

The rules and regulations around granny flats vary from state to state and from council to council, so research is the key.

In New South Wales, state-wide planning legislation allows granny flats to be built and rented out in the same way as any other residence.

In Queensland, the minimum lot size, maximum size, required setbacks and rules about who can live in a granny flat; all differ from council to council. This is likely to be more flexible in rural areas.

A granny flat is called a Dependant Accommodation in SA. Of course, one must gain DA approval from council, as in all other states. Most councils will give approval, under the provision that an immediate family member will occupy the granny flat. Meaning, they cannot be an investment property. As such, the unit must be connected to the same services (i.e. electricity, phone line, sewer, and water) as the main home. Importantly too, you can only have a maximum of one separate bedroom.

Some of the rules in Tasmania dictate that the maximum size must be no more than 60 square metres or 30 per cent of the total area of the main dwelling (whichever is less). They can be rented to anyone.

Granny flats are called a secondary residence in the ACT and can be anywhere from 40–90 square metres. One must have a minimum land size of 500 square metres, and it must be in a residential zone. It must be a water sensitive urban design and suit the needs of people with disabilities. It can be rented out, but one must provide private open space for tenants plus one car parking space.

Meanwhile, in Victoria, a granny flat can only be rented to a person dependant on a resident of the main dwelling. Some councils insist on it being a moveable building, whilst other councils require that when the situation arises, it is possible to be removed. A subtle but important difference.

A custom-built, two-bed flat with a kitch-enette and bathroom (60m2) costs about $150,000 to build – but contract variations could increase this amount. Package deals usually include: all internal areas and typical external areas like the framework, wall cladding, linings, insulation, windows, doors, roofing, flooring, architraves, rainwater control and painting. The condition of the land and ease of access to the site, are also important considerations in any build.

Things like sewers, stormwater drains, easements etc all need to be considered. The last thing you want to do is pre-design something that is going to conflict with the existing property’s underground layout. This can be the biggest complication with the process, so it’s a critical stage.

On average around Australia, three months is normally required for the council approval process to be complete; and the build usually takes about twelve weeks to construct in optimal weather conditions.

All the planning, fundamental chores and obligatory compliances can be taken on by engaging a licensed builder to carry them out on your behalf. You should be prepared to spend many hours with him discussing all sorts of construction related things; to be assured you will get what you paid for and are happy with the outcome.

At the planning stage, an owner needs to decide whether to use a council certifier or a private certifier to sign off the DA plans submitted to council by the builder at critical points and at the end; to issue an Occupation Certificate. This is the final certificate issued for complete certification of the granny flat and is required before anyone can legally move in. It is also required to fully insure the building.

Often builders use their preferred certifier. A private certifier will be more costly than a council certifier, but they tend to be a lot easier to get hold of and are fundamentally customer service orientated because they work for themselves. A council certifier on the other hand is always cheaper yet must be booked weeks in advance. This can hold-up the building process causing costly delays. They also tend to offer very little in the way of problem-solving solutions during the journey for fear of litigation. All private certifiers are accredited by the respective state regulator and are all fully insured.

Unapproved granny flats, especially those not installed by qualified builders; are a serious health and safety concern.

There is no way an insurance company will issue any payout if anything goes wrong with the granny flat. This is because once an assessor comes over, it will be deemed as being built illegally.

The landscaping area that is required varies depending on the size of the property. For instance, in NSW if it’s 450–600 square metres then it’s 20 per cent of that area which must be garden or softscape. You will also need to check that the granny flat complies with the guidelines of the estate in which you are building in. New estates often have strict guidelines to ensure that the streetscape remains harmonious. Items such as external colours, the plants allowed in the garden and the materials used on the facade of the dwelling; need to be addressed.

So, this small residential building commonly known as a granny flat can have an enormous impact on any family’s health and welfare both emotional and financial and its wealth accumulation over the decades.

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