Adding a granny flat to the grounds of your property is a move that can bring a multitude of benefits. This installation will offer individuals the chance to make money from renting it out or alternately it can be used as additional space for a family member to live in. When it comes to a renovation or construction of this scale, the safety of workers and visitors on site is paramount. Therefore, having the correct hazard warning sign in place is essential, to warn of drops, machinery, moving vehicles, and more. Good health and safety practices like this will help to reduce the incidence of workplace accidents. Once construction is complete, homeowners want to make sure that it is not only fit for purpose, but that it can also add some value to the property. Even if an individual has no plans to sell right away, it is always worthwhile seeking out options to add value to a property. So the question is whether or not a granny flat is something that can give added value to your property? Let’s take a look.
Reasons Why A Granny Flat Could Add Value
Whilst we do know that granny flats offer an opportunity for income, that in itself doesn’t add value to the property. The added value comes from the opportunity for the buyer to use the granny flat for various reasons whether it be used as a home, a guest house or a rental option. Another reason why granny flats add value to a property is because of the flexibility which they offer to the likes of a growing family. For example, the prospect of an older teenager being able to take up residence in the future is certainly alluring to many young families who are looking for a long term home.
Is The Investment Worthwhile?
In Australia, the average cost of building a granny flat is not too high, but what does that look like in terms of the amount of value which you will be able to add to your home? In reality, it is highly unlikely that you’ll be able to count on increasing the value of your property by the exact amount which you have spent on the granny flat, but many experts suggest that at least 60% of the cost could be added to your overall property value. However, the beauty of this type of construction is that prior to selling the property there is ample opportunity to recoup some of your investment through short term rentals or long term lease agreements.
Whilst individuals will have to pay tax on any income that is made from the rental of the granny flat, this is not to say that the build isn’t worthwhile. In many states around the country you will find that if the granny flat is worth more than your income, then you may very well be able to claim both the loan interest, plus maintenance and insurance on the flat, as tax deductions. For example, in terms of granny flats Melbourne there are also deductions on depreciation, which is another possible tax benefit. Meaning that overall, the addition to the property is costing less and continuously adding more value to your home.
The answer therefore is that a granny flat is a shrewd investment, which can most certainly add some value to your property.