Mortgage loan for IP and Granny Flat?

[zinc]

If I purchase a house with the intention of building a GF at the back (i move into it and rent out the front house) how can I get extra cash/loan on top of my Mortgage to build the GF?

Would I need an extra deposit on top of the 5% I'm intending to use on the initial Mortgage Loan?

Would I need to earn more?

Would lenders take into account the rental return from the front house?

 

[Aaron_C]

1. Yes you will if the valuation of the end valuation of granny flat + house doesn't stack up above what you paid in construction costs. Also if you are going for 95% LVR loan you need to ensure that the lender will accept a granny flat attachment as security - particularly when the entire loan is an investment one (credit scoring issue).

2. Depends on if there is a servicing issue.

3. Yes if it is an investment.

 

[Rolf Latham]

seek very specific advice not just on the finance per se, but the val prospects of what you are looking to do

In below median price situations, a granny build will add approx 70 c in the dollar to the property...... in median its 1 to 1 and above median its usuallywell above 1.1.

If you are that dependent on a house +granny build,its a high risk situation in that you are letting a valuer dictate your next step.............


the other area, be mindful there are some lenders that wont do GF period above 80 %

ta
rolf

 

[zinc]

ok, so in a median situation 1for1 , for example, the Granny build will add value to the existing property value.

Im guessing this means if I buy the existing house for $300k and the Granny build, all up, costs me $100k, the new valuation of the whole property would be $600k?

not sure how to work this out?

 

[zinc]

Well im thinking I could possibly kill 2 birds with 1 stone here.

Im currently renting, and have been for the past 5 years, in the same flat.

I want to put my rent money to good use, as opposed to paying off someone else's mortgage.

My major goal is to buy an investment property this year.

New idea: why dont I buy an investment property and build an affordable GF at the back, in which I can live - so now i'll have 2 income streams paying off the mortgage?. good yield.

 

[zinc]

may possibly have to find a 'clued-up on GF's ' type of valuer??

 

[Aaron_C]

ok, so in a median situation 1for1 , for example, the Granny build will add value to the existing property value.

Im guessing this means if I buy the existing house for $300k and the Granny build, all up, costs me $100k, the new valuation of the whole property would be $600k?

not sure how to work this out?

Umm...no. A 1 for 1 situation means that if you spend $100k on a $300k house to put a granny flat, the val will come back at $400k.

 

[Rolf Latham]

may possibly have to find a 'clued-up on GF's ' type of valuer??

thats not easy with most lenders now using Valex or VMS you will get the luck of the draw

add to that a 95 % lend, an you might as well put your money on red or black

ta

rolf

 

[Rolf Latham]

ok, so in a median situation 1for1 , for example, the Granny build will add value to the existing property value.

Im guessing this means if I buy the existing house for $300k and the Granny build, all up, costs me $100k, the new valuation of the whole property would be $600k?

not sure how to work this out?

Median meaning Median for the Capital City, not a regional centre or outlying burb.

For Perth that would be over 500 k.

Note also, that my comment relates to situation where there are sufficient numbers of comp sales for a valuer to hook onto........... Thats possible in some parts of Syd, where GF revolution has been going for a while.

ta

rolf

 

[spludgey]

It's definitely interesting reading this thread.

I was toying with the idea of doing just that with this property.
I'll have just shy of $60k to use all up (stamp duty, deposit, legal, etc). What do you reckon, doable or not?
Plus the tree in the backyard might be a bit of a problem.

Hope I'm not stealing your thunder zinc.

 

[Rolf Latham]

It's definitely interesting reading this thread.

I was toying with the idea of doing just that with this property.
I'll have just shy of $60k to use all up (stamp duty, deposit, legal, etc). What do you reckon, doable or not?

possible, but a lot of stars would need to line up

The CTC( Cost to complete) the GF will likely exceed the TOCV ( Target on Completion val), meaning youd need more equity than you normally would.

the upside is that the CC already has a bus load of GFs mostly unapproved ............so there should be some decent comps to analyse if its doable

ta

rolf

 

[zinc]

Hey Rolf,

What parts of Sydney?

Trying to get an ideal of whats possible, I may even purchase something over that way?

Are GF's restricted to Sydney or do the GF regulations/opportunities apply to the rest of NSW to?

 

[Rolf Latham]

Hey Rolf,

What parts of Sydney?

Trying to get an ideal of whats possible, I may even purchase something over that way?

Are GF's restricted to Sydney or do the GF regulations/opportunities apply to the rest of NSW to?

All of NSW I believe

Please line up with the other 9967 people that are in front of you for suitable stock

ta
rolf

 

[zinc]

crikes!

well i 'spose the fundamentals for your standard 3x1 house would still apply for a GF? - close to transport, shops, p.o, main road, schools ??

Or are there new criteria that'd make a GF more attractive/rentable?

Has someone written a 'How to invest in Grannys' book yet? lol

Rich Granny Poor Granny!!


darn it, no job as of today, fark sake...