Is it hard to rent out granny flats and what kind of tenants do they attract? Granny flats are actually a lot easier to rent out than you might think.
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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.