First of all I must say these forums are amazing. They have definitely opened my eyes to a lot that I did not know before and I have also met and spoken to a couple of really good people from here.
I am only new to this so I hope I can get some information on further cost spend that I am about to make.
I have purchased a property in Hills area NSW that has a 3 bedroom as the part of the main house and an existing extension on it with a large bedroom, shower and toilet which has about roughly 78 SQM living areas as the extension.
In it's current format it is costing me about $3620 monthly interest repayment, plus about $125 monthly insurance plus about $300 per month for water and council. That does not include the costs incurred while the property is vacant which is roughly about 3 weeks before I can tenant it. Now the rent for the property is $660 per week. Therefore per month I am roughly minus $1405 which we then divide between myself and my wife's income for tax purposes.
Now I may potentially be able to turn this attached extension into a dual occupancy (I have done some basic homework / enquirers). This costs a bit higher than a granny flat to get approved and build but allows me to turn the extension into a 2 bedroom self-contained independent living area with it's own post box and bin etc. This gets better rent and longer tenants compared to a situation where I turn it into a granny flat.
I anticipate in a bad scenario I may need about 80k in order to draw plans and get approval from council and also put in a new kitchenette, get the walls up and running, do the required plumbing etc as most of the structure is already there.
This 80k then takes my monthly (interest only) repayments to $3940 and may also increase my council rates and insurance rates (lets say double) to $250 and $600 per month. However in this scenario I can then get at least $500 for the main house and $320 for the second occupancy. (These numbers are according to the current rental market which is not a great market for this area.). So my rental is then at $820 per week and I anticipate as the rental market improves I may be able to achieve $900 per week.
Obviously a lot of the above numbers are bad case scenarios. For example I may only need 35k to get the second occupancy up and running and the rates may increase but not double.
The plan is then to keep the property for the next 6 years before assessing the market again and potentially selling.
But my questions are, is this a worthwhile spend or should I keep everything as is?
Secondly from people who have experience in dealing with attached occupancies / granny flats, can this increase the amount of vacancy per year due to tenants not getting along or not liking the lack of privacy? (the obvious plus is that it makes the whole thing more affordable)
I would appreciate any detailed comments.
I am only new to this so I hope I can get some information on further cost spend that I am about to make.
I have purchased a property in Hills area NSW that has a 3 bedroom as the part of the main house and an existing extension on it with a large bedroom, shower and toilet which has about roughly 78 SQM living areas as the extension.
In it's current format it is costing me about $3620 monthly interest repayment, plus about $125 monthly insurance plus about $300 per month for water and council. That does not include the costs incurred while the property is vacant which is roughly about 3 weeks before I can tenant it. Now the rent for the property is $660 per week. Therefore per month I am roughly minus $1405 which we then divide between myself and my wife's income for tax purposes.
Now I may potentially be able to turn this attached extension into a dual occupancy (I have done some basic homework / enquirers). This costs a bit higher than a granny flat to get approved and build but allows me to turn the extension into a 2 bedroom self-contained independent living area with it's own post box and bin etc. This gets better rent and longer tenants compared to a situation where I turn it into a granny flat.
I anticipate in a bad scenario I may need about 80k in order to draw plans and get approval from council and also put in a new kitchenette, get the walls up and running, do the required plumbing etc as most of the structure is already there.
This 80k then takes my monthly (interest only) repayments to $3940 and may also increase my council rates and insurance rates (lets say double) to $250 and $600 per month. However in this scenario I can then get at least $500 for the main house and $320 for the second occupancy. (These numbers are according to the current rental market which is not a great market for this area.). So my rental is then at $820 per week and I anticipate as the rental market improves I may be able to achieve $900 per week.
Obviously a lot of the above numbers are bad case scenarios. For example I may only need 35k to get the second occupancy up and running and the rates may increase but not double.
The plan is then to keep the property for the next 6 years before assessing the market again and potentially selling.
But my questions are, is this a worthwhile spend or should I keep everything as is?
Secondly from people who have experience in dealing with attached occupancies / granny flats, can this increase the amount of vacancy per year due to tenants not getting along or not liking the lack of privacy? (the obvious plus is that it makes the whole thing more affordable)
I would appreciate any detailed comments.