Financing Granny Flat - chicken and egg
- Thread starter BelezaPura
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- finance granny flat
Currently you cannot subdivide a GF and sell of separately.
If you were to sub divide land and build you will most likely have increased the value of the property (providing the numbers for a subdivision/dual occupancy worked in the first instance) and you could sell either the land with P&P's or the fully constructed property to another buyer. You could not do that with a GF (at this point in time)
GF takes 10 days to approve in most cases and 10 week build time, lower holding costs bc the construction on a GF is cheaper.
Not sure if in NSW you can get a second dwelling built and approved in that time frame? In Melbourne it takes anywhere from 6 - 12 months just to get the approvals through.
Hi Newbieatlife,
I am a little confused?
You secured a 120% of construction price, but had an 85% LVR?
What was the 120% secured against? Purely the build, the build plus the house, the build plus another property which had equity in it?
Sorry let me explain,
bought the property at 377,000 with 80% LVR = 20% deposit ($75,400) = loan of $301600
bank valued the property plus extra granny flat at $480,000....... minus initial deposit of $75400 = ~85% LVR and I have access to ~$103,000
cost of granny flat build = $82500 inc. GST so the construction loan i was able to borrow equates to about 120% of the build cost
chuck in things like fees, draftsman, private certifier (which I had to pay up front), fencing, site preparation (which I had to pay up front) etc etc and I don't get left with very much at all but I didnt really have to fork anything out of my pocket in the end which was good!
It wasn't exactly $480,000 I think it was even a little bit more but I forgot the exact numbers lol
PM me if you want details of the broker I used....there was a lot of pfaffing about with other banks and crappy valuations before I ended up with Homeside and I think the prospect of me refinancing with them was also a drawcard to give me more money? I also had everything ready in terms of plans etc before I approached the bank right down to details like sectioning off the 2 properties to ensure purely a separate dual occ., letters from agents confirming expected rental return on the granny flat etc etc....Not sure if it made a difference but it worked out OK
bought the property at 377,000 with 80% LVR = 20% deposit ($75,400) = loan of $301600
bank valued the property plus extra granny flat at $480,000....... minus initial deposit of $75400 = ~85% LVR and I have access to ~$103,000
cost of granny flat build = $82500 inc. GST so the construction loan i was able to borrow equates to about 120% of the build cost
chuck in things like fees, draftsman, private certifier (which I had to pay up front), fencing, site preparation (which I had to pay up front) etc etc and I don't get left with very much at all but I didnt really have to fork anything out of my pocket in the end which was good!
It wasn't exactly $480,000 I think it was even a little bit more but I forgot the exact numbers lol
PM me if you want details of the broker I used....there was a lot of pfaffing about with other banks and crappy valuations before I ended up with Homeside and I think the prospect of me refinancing with them was also a drawcard to give me more money? I also had everything ready in terms of plans etc before I approached the bank right down to details like sectioning off the 2 properties to ensure purely a separate dual occ., letters from agents confirming expected rental return on the granny flat etc etc....Not sure if it made a difference but it worked out OK
Interesting GF for $12K
Not sure if anyone has seen this before and has any comments or feedback, but I thought it was interesting. Perhaps an import from China or something similar.
Second property listing.
http://www.gotchahome.com.au/relocatable.html
Not sure if anyone has seen this before and has any comments or feedback, but I thought it was interesting. Perhaps an import from China or something similar.
Second property listing.
http://www.gotchahome.com.au/relocatable.html
$11,000 for a GF!?
I wonder how safe something like this really is. Also, assemble it yourself by watching instructions on a DVD..., really?
Would also love to hear some feedback.
It's a relocatable granny flat.They CANNOT be approved by a Certifier and almost all Council's wont approve relocatable/transportable buildings.
Yiou can get you half decent 60 sq m granny flat for 25k delivered ready for construction BUT you still need>
1. Approvals $5k
2. Site Costs (excavation, connection to all servioces) $25k
4. Construction costs (Qualified Builder) - $40k
3. Final touch-ups (letter-box, clothesline, curtains, fencing, landscaping etc)
Supply of a kit is the cheap part, don't be fooled by seemingly cheap structures.
