Granny Flats seen as Cash Cow for Property Owners
The latest real estate craze that is gaining popularity for some investors is to build a granny flat in the backyard and generate two rental incomes.
With rental yields of nearly 10 per cent, this concept is gaining traction. A number of construction companies are even offering to build a granny flat as part of the whole property package.
The numbers also appear to add up. For example, an investor could purchase a house for around $300,000, build a granny flat for $100,000 and earn two rental incomes, which could total more than $600 per week.
Some property experts are warning that this could cause a glut of rental property, and advise investors to make sure that they do a thorough amount of research before investing in a granny flat.
Experts have cautioned that although the properties can be rented out as two properties, the granny flat is legally not allowed to be sold as a separate entity from the main house.
Therefore, investors could potentially be over-capitalising when it’s time to sell the property, and end up being out of pocket.