Exactly. The point of investing is to make more money so that we can be comfortable. If you can't sleep at night, you aren't comfortable. Kind of defeats the purpose of getting into this game to begin with.
Do granny flats add value? Some real life figures :)
- Thread starter neK
- Start date
Exactly. The point of investing is to make more money so that we can be comfortable. If you can't sleep at night, you aren't comfortable. Kind of defeats the purpose of getting into this game to begin with.
this is just a common mating strategy. IMO there are better ways to skin this however along sort of similar themes
GFs can be great for cash flow,
however, just because a valuer values it at $X (high or low)id be very careful at taking it as gospel
you can get into a lot of sticky situations long term including negative equity or over exposed
I think the trend for GFs is slowly dying down
however, just because a valuer values it at $X (high or low)id be very careful at taking it as gospel
you can get into a lot of sticky situations long term including negative equity or over exposed
I think the trend for GFs is slowly dying down
Couldn't have said it better. And yes 2 RE agents have said it would be at least 700k in current market conditions.. not that i believe them, just an indication
Why building a GF would put you in negative equity? Can you elaborate on the sticky situations you have mentioned?
a contact of mine, bought a property, put a GF on it
was valued by a valuer, at what I thought was a bit too high, refinanced it
however, reality was that the GF was only going to increase the value a bit more due to the good cashflow,
however, when it came time to sell, it would have sold for $100k less then what it was valued at
so essentially he had refinanced 105-110% of what it was worth
good for obtaining cash, but put a big dent in his portfolio LVR
so he ended up not selling and selling something else
neK, your estimate is close. according to recent sales and residex the figure is 555k....which means they valued my brick veneer 2 br granny flat at 85k??
having said that i will still do it again. My outlay for GF was 20k but im geting rent 390pw just for the GF.
Unfortunately yes. But as retirerich mentioned, on the open market, it would probably fetch $700k (therefore a difference of $60k between open market and bank valuation).
Based on that, your 2 bedroom granny flat is valued at $85k by the bank, or $145k by a buyer in the open market
Also what do you mean by your outlay was $20k? How did you manage that? Was it a garage conversion or did you do a lot of the build yourself (hence saving of construction costs?)
All the said, I too would happily continue buying properties and putting granny flats on them. Its a strategy allows me to grow my portfolio while allowing me to sleep comfortably at night.
Last edited:
Interesting to know the bank valued it higher than the open market for a House+GF. I argue that this isn't the case for majority House+GF, more the reversal.
In your mate's case, I didn't understand why would this put a big dent in his portfolio, when bank valued higher? He could accessed the equity based on bank valuation, and chose not to sell.
also "would have sold for $100k less", is this property sold, or is this you/your mate think the property would achieve in an open market...?
I don't have a problem accessing equity from a bank valued 5-10% higher than an open market can achieve. I feel even more secure when my dual income can service when interest go to 7%.
I am only hearing others arguing that bank valuation is 5-10% lower and cant' access the equity.
Last edited:
