| by Kenneth Chase | No comments

Is It Hard To Rent Out Granny Flats?

Me Mean Ben recently talked about the two
properties to financial freedom strategy where you purchase two investment properties and
on each of those you build a granny flat in order to achieve financial freedom. And I got asked the question, is it hard to
rent out granny flat? So a lot of people aren’t sure about this,
whether or not granny flats are a good idea if they’re just going to lay vacant, who’s
going to want to live in them? So I’m back with Ben Everingham who you guys
might not know, but he actually has a property rental management company as well. And so he knows more about that. So is it hard to rent out granny flat spin? It’s actually, you know, when I first started
to think about granny flats, I was like, he’s going to leave in these things. What are they gonna read for? Is there even a market for them in Queensland? Because I’d seen them work very, very effectively
in New South Wales in Sydney, but they’re relatively new concept up here. So from, you know, having a rental business
managers, at least a couple of hundred properties in Brisbane right now, granny flats are actually
the easiest product to move life because there’s so much more affordable than units, townhouses,
so houses in the suburbs that we do them in, which are generally in the beach or close
to the CBA day. You find that there’s always a single mom,
a single dad, a young couple looking to save some money, a fly in fly out worker, a retiree
looking to sort of build that, that pace of the marketplace, which is, you know, that
lower entry point and more affordable option to actually live in. Yeah. And I think people should know that granny
flats do range from. You’ve got your little studio old places that
were kind of tied together. Like I think you used to have one at the Frankenstein
house sort of thing to now granny flats being these new build two bedroom houses. Basically. They’re like mini houses, kick ass now man. Like they’re like tiny fullblown homes in
backyards with little porches, like really functional living spaces, big bedrooms. Like it’s a completely different concept than
the shanty tangy. Say you’ll around Sydney at the moment because
you know, people just did the diocese and chucked up whatever they could to get extra
rent. Yeah. And I think people should think about when
they say is it hard to rank granny flats? So is it hard to rent units because the granny
flat is kind of like a unit or is it hard to rent a two bedroom house because often
granny flats are like that as well and it’s kind of like, well if people are going to
live in units where they’re in, they’ve got common spaces with other people, they might
only have a balcony sort of thing. Are those people going to prefer to live in
the unit or if there’s a granny flat in the same suburb that offers a similar size living
space, but then also has a private backyard area or maybe a shared area. It’s got a porch. People love that outside space being fully
self contained with your own washer dryer, that sort of stuff. Not Having to share with other people in the
unit. It just makes a lot of sense to me. Well, I personally lived in a granny for two
years, like my wife’s parents have a little detached granny flat on the side of their
property and I lived in there with my two children. We’re, we’re renovating a house and we put
it on the market thinking it would take like three months to sell in itself the first weekend
and then we’d bought a piece of land that we’re going to build on, which we thought
we’d transitioned from one to the other and the lane took an extra nine months to build
and to register and then to build them, we thought it would. So we actually ended up staying in this thing
for like almost two years with two kids. And I loved it man. Like no cleaning, super, super simple. Like completely self contained but connected. I’m like, it was a, it was an experience for
me at that time, my life when it was really important to save money and invest money as
a really, really affordable option compared to going and getting a unit or a townhouse,
which is generally at least 50 to 100 bucks more expensive than a granny flat in the same
suburb in Brisbane right now. Yeah, and my father in law is just moving
into a granny flat in Sydney as well. He’s moved out of sheer housing and found
a granny flat and so he’s moving into a granny flat, so I guess there’s, there’s all sorts
of people out there who would love to live in granny flats. It’s not just for grantees, it’s for everyone
and it is a unique product on the market that is more affordable and so can be more desirable
as well. Obviously if you’re going to build a granny
flat, you want to make sure that there’s low vacancy rates in the area because that’s going
to affect how hard it’s going to be to rent. So it’s not like granny flats rent well everywhere. It still depends on the area, but in terms
of the difficulty to get them rented, I can’t imagine that it will be more difficult than
a unit or a house in a suburb with a vacancy rate below two
percent and that’s really the benchmark in Sydney, Melbourne, Brisbane that people should
be looking for when targeting a suburb. I’ve found from literally renting out a fair
few of these things personally and owning a couple of them myself that you’re looking
at between one week to three rates, absolute maximum vacancy to find a tenant as long as
you’re realistic on the price point. And another question that I used to get asked
all the time, I still get asked by clients or the time is who’s renting them? And I sort of talked about the profile before
of those different groups, but what does that actually mean in terms of average income? The average income of a person renting a granny
flat for now business at the moment, and we’d probably have 48, 40 different types of granny
flats in our management business would be at least 50 up to 100, $20,000. So you’re not just picking up the bottom of
the market, the students, the people on the lake and the very low income and as often
it’s people looking to leverage off the granny flat, stay there for six months to two years,
get themselves into a stronger financial position and then jumped forward from there. So it’s really surprising who you find in
these things and people often stay for a lot longer than you expect too. It’s not just temporary really, really short
term accommodation. You know, we’ve got that have been in some of these things for two or three years with
us now. And so if you’re looking at the two properties
to financial freedom strategy and you’re just not sure about whether or not the granny flats
will rent, then hopefully this has eased your mind. And so if you want to check out that strategy
where we talked about that in more detail, go to on-property dot com dot a dot forward
slash. What is it? Four slash five. Oh eight. Which is the episode where we did that over
there. I know you’re not going to edit these handler. This is awesome. I probably will edit this. Maybe I shouldn’t. Okay, good on-property don’t condo you. Four slash five slash eight. You can check out the two properties to financial
freedom strategy. If you haven’t already, go ahead and check
that out and that’s it from us today. Until next time, stay positive.

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