A Complete Granny Flat Build Thread
Background
Near the middle of last year I was ready for my next IP and did a lot of research and number crunching on what kind of IP to get. The main goal was a decent yield/cash flow with CG a close second. Ended up going for a house and GF.
Signed up with my BA (Alan) in early July to find a block in the Whalan, Shalvey, Tregear area with a price of 250-300k and a yield of 6-7% that was suitable for a 60m2 2 bedroom GF.
The Property
In early August the BA found a place in Shalvey on a 592m2 block for 250k that had 3 bedrooms, 1 bathroom and was suitable for the 60m2 GF. The property was vacant at the time and rent was expected to be $300-310 before the GF and around $290 after. A GF on this block was expected to have a rent of $250. The numbers were ok so offers and negotiations started.
After bit of chest thumping and fist waving the price was negotiated town to 245k with a 42 day settlement. Contacts were exchanged a few days later.
The Team
Being a novice investor with no experience in developments of any kind and not living in Sydney, I need a good team to hold my hand and keep me from doing anything too stupid. This is the team I ended up with.
Buyer’s Agent – Alan Fox (Propertunity)
Mortgage Broker – Peter Tersteeg (PT Bear)
GF Designer/Builder – Serge Panayi (Brazen)
PM – Rosie Dunn from St.Marys Professionals
So far the only reason why this build is going ok and not turned into a mess is the team have all been great and done an excellent job.
The GF Design
As soon as contracts were exchanged I signed up with Serge who did the initial assessment and got back to me with some designs and this is where I made a major mistake.
The space available in the backyard for the GF was limited and Serge gave me 4 different designs that were the best that could be done with space restrictions. The designs varied from 58m2 to 52m2 and that was pushing it. You can see the attached site option 1 and 2.
I ended up choosing a 52m2 design that would involved a shed conversion and moving the GF next to the rear boundary and the sewer which would delay planning until November.
Everything was going to plan until a technical problem popped up and the size had to be reduced from 52m2 to 45m2 or moved further away from the rear boundary. I went for the smaller design. I probably should not have.
My mistake. Clueless owners like myself would try the patience of a saint and Serge was great. Put up with my panic attacks and inability to understand the facts.
The final site plan has been attached. Can't attach the GF plan because of the 3 file upload limit. I'll try to upload that later.
At Present
The house is tenanted with a great family thanks to Rosie and is rented for $300 a week to give a gross yield of 5.9% with a rent raise expected with the first lease renewal after the GF goes up. The numbers are listed below.
$245,000 House
$8,800 BA’s fee
$7,00 Stamp Duty
$3,000 Council, solicitor’s, Building and pest
$264,00 Total Purchase cost
The GF is expected to rent for $260 a week to give a gross yield of 12.2% The expenses so far are
$87,000 45m2 GF
$3,900 Design & Planning
$3,000 For Sewer, peg out, shed approval etc
$2,300 Color bond fence
$800 misc expenses
$5000 expected expenses
If the numbers don’t change, this gives a gross yield of 8.0% for both the house and GF. to PM
The GF is a bit of a squeeze but it is completely separated from the house by a 6 ft colorbond fence so both sets of tenants have plenty of privacy. Hopefully this will make the GF easier to rent and improve the value of the property.
Next
Excavation began today and the GF is expected to be ready to let by mid to late April.
Between now and then gas, some pencil pines and a few other things need to be sorted out. Not sure what but I’m working on it.
Your Comments/Feedback/Opinions
This has been a big learning curve for me and an essential step (small one) in my property investment journey on the way to bigger and better projects. So if you have any feedback/comments on what I've done wrong, what I should have done, what I can/should do etc etc, I'd be delighted to hear from you.
Background
Near the middle of last year I was ready for my next IP and did a lot of research and number crunching on what kind of IP to get. The main goal was a decent yield/cash flow with CG a close second. Ended up going for a house and GF.
Signed up with my BA (Alan) in early July to find a block in the Whalan, Shalvey, Tregear area with a price of 250-300k and a yield of 6-7% that was suitable for a 60m2 2 bedroom GF.
The Property
In early August the BA found a place in Shalvey on a 592m2 block for 250k that had 3 bedrooms, 1 bathroom and was suitable for the 60m2 GF. The property was vacant at the time and rent was expected to be $300-310 before the GF and around $290 after. A GF on this block was expected to have a rent of $250. The numbers were ok so offers and negotiations started.
After bit of chest thumping and fist waving the price was negotiated town to 245k with a 42 day settlement. Contacts were exchanged a few days later.
The Team
Being a novice investor with no experience in developments of any kind and not living in Sydney, I need a good team to hold my hand and keep me from doing anything too stupid. This is the team I ended up with.
Buyer’s Agent – Alan Fox (Propertunity)
Mortgage Broker – Peter Tersteeg (PT Bear)
GF Designer/Builder – Serge Panayi (Brazen)
PM – Rosie Dunn from St.Marys Professionals
So far the only reason why this build is going ok and not turned into a mess is the team have all been great and done an excellent job.
The GF Design
As soon as contracts were exchanged I signed up with Serge who did the initial assessment and got back to me with some designs and this is where I made a major mistake.
The space available in the backyard for the GF was limited and Serge gave me 4 different designs that were the best that could be done with space restrictions. The designs varied from 58m2 to 52m2 and that was pushing it. You can see the attached site option 1 and 2.
I ended up choosing a 52m2 design that would involved a shed conversion and moving the GF next to the rear boundary and the sewer which would delay planning until November.
Everything was going to plan until a technical problem popped up and the size had to be reduced from 52m2 to 45m2 or moved further away from the rear boundary. I went for the smaller design. I probably should not have.
My mistake. Clueless owners like myself would try the patience of a saint and Serge was great. Put up with my panic attacks and inability to understand the facts.
The final site plan has been attached. Can't attach the GF plan because of the 3 file upload limit. I'll try to upload that later.
At Present
The house is tenanted with a great family thanks to Rosie and is rented for $300 a week to give a gross yield of 5.9% with a rent raise expected with the first lease renewal after the GF goes up. The numbers are listed below.
$245,000 House
$8,800 BA’s fee
$7,00 Stamp Duty
$3,000 Council, solicitor’s, Building and pest
$264,00 Total Purchase cost
The GF is expected to rent for $260 a week to give a gross yield of 12.2% The expenses so far are
$87,000 45m2 GF
$3,900 Design & Planning
$3,000 For Sewer, peg out, shed approval etc
$2,300 Color bond fence
$800 misc expenses
$5000 expected expenses
If the numbers don’t change, this gives a gross yield of 8.0% for both the house and GF. to PM
The GF is a bit of a squeeze but it is completely separated from the house by a 6 ft colorbond fence so both sets of tenants have plenty of privacy. Hopefully this will make the GF easier to rent and improve the value of the property.
Next
Excavation began today and the GF is expected to be ready to let by mid to late April.
Between now and then gas, some pencil pines and a few other things need to be sorted out. Not sure what but I’m working on it.
Your Comments/Feedback/Opinions
This has been a big learning curve for me and an essential step (small one) in my property investment journey on the way to bigger and better projects. So if you have any feedback/comments on what I've done wrong, what I should have done, what I can/should do etc etc, I'd be delighted to hear from you.
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