Granny Flats the Popular Investments

Data collected by BMT Tax Depreciation, Australia’s leading tax depreciation specialist, indicates that in the 2016-2017 financial year there was a 22 per cent growth in the number of schedules requested for granny flats nationwide.

Of the states Queensland, Western Australia and New South Wales saw the highest growth in the number of depreciation schedules requested for this type of property.

“Key growth areas in New South Wales which stood out in terms of the number of depreciation schedules requested during 2016-2017 when compared with the previous financial year included the Central Coast with a 105 per cent increase, Wollongong with a 150 per cent increase and the Blue Mountains with a 150 per cent increase,” Mr Beer said.

“In Queensland South East Brisbane saw a 275 per cent increase, Caloundra a 400 per cent increase and Cairns a 150 per cent increase in schedules requested for granny flats during 2016-2017 while Greater Perth and Mundaring in Western Australia both saw a 200 per cent increase in requests,” said Mr Beer.

Data collected by BMT Tax Depreciation, Australia’s leading tax depreciation specialist, indicates that in the 2016-2017 financial year there was a 22 per cent growth in the number of schedules requested for granny flats nationwide.

Of the states Queensland, Western Australia and New South Wales saw the highest growth in the number of depreciation schedules requested for this type of property.

“The Australian property market has recently experienced a period of strong capital growth. However, this has been offset for many investors by a fall in the indicative yield of their portfolios,” Mr Beer said.

“This has led many investors to consider creative means to boost their portfolio’s yield, such as the addition of a granny flat which can be constructed for around $121,000 and rented at a rate achieving around a 15 per cent yield annually,”

“This is far higher than the rental yield typically achievable on a house or unit in Australia, making granny flats an interesting investment proposition,” Mr Beer said.

The Affordable Rental Housing – State Environmental Planning Policy which allows New South Wales property owners to rent their secondary dwellings came into place in 2009 and since then there has been a steady increase in the number of investors choosing to build and rent out granny flats.

Research data from Flatmates.com.au shows that there was a 16 per cent increase in granny flats being listed on the site during 2016, while searches for granny flat accommodation increased by 84 per cent during the last quarter of 2016 alone.

However, Mr Beer warns investors to do their research so they are fully aware of the rules and restrictions set by local councils and state governments before deciding to build a granny flat for rental purposes.

“Each area provides regulations regarding the minimum land size and maximum plot size required for granny flats or secondary dwellings,” he said.

“In some states and specific council areas there are rules which mean that investors are not able to rent their granny flats for income producing purposes,”

For those who rent out granny flats it is also important to seek advice from a specialist Quantity Surveyor to discover what depreciation deductions they can claim.

“There are significant depreciation deductions available on these types of properties, which investors might not be aware of,” said Mr Beer

“The average first year depreciation deduction on a granny flat is $5,288, while over five years these deductions can add up to around $23,713,” concluded Mr Beer.

Real Ezi Homes take all the heavy lifting out of the approval and construction process.

Having your Granny Flat build by a Home builder who has built over 4000 homes across the country, gives people confidence they are in good hands. Karl Mifsud from Real Ezisaid “We are across the State Government Policy on Affordable Living and specifically to the Guidelines around building a granny flat. We also employ a Building and construction certifier to ensure your proposed dwelling is compliant”. The end result Is a 100% compliant granny flat built to compliment the existing dwelling and provide not just a flat but a home.



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