Who Actually Rents Granny Flats?
A big concern with people looking to invest in granny flats is who is actually going to rent a granny flat? Well we are finding that a lot of high quality tenants want to rent granny flats.
0:00 – Introduction
0:48 – Making the distinction between new build and old school granny flats
2:32 – There is a broad spectrum of people who rent granny flats
4:17 – If priced correctly we get a lot of people through the granny flats
5:45 – You need to make sure there is the demand for granny flats in your area
a big concern with people looking to invest in granny flats is who is actually going to rent a granny flat am i going to have someone in my backyard who is on the dole who is a derelict person who’s not going to take care of that property who was just an extremely undesirable tenant or am i actually going to get good tenants for this property that’s what we’re going to be talking about in today’s episode hi i’m ryan from onproperty helping you achieve financial freedom and if you haven’t heard a lot about granny flats or haven’t seen one of my walkthroughs of the granny flats i’ll link up to it down below if you haven’t or if you haven’t been to a new build granny flat yourself you might find yourself asking who on earth is going to rent this who is going to rent a granny flat and live out the back of someone’s house now it’s important to make the distinction here between a new build granny flat and a very old school style granny flat so old school might be that cockroach infested granny flat that is in the backyard of someone’s house but it’s pretty worn down probably full as as best as as well and actually shares the yard with the front house and might even share some amenities like a laundry with the front house or something like that something that someone built on the cheap to actually has their legitimate grandma because she needed to move on the property with them granny flats have come a long way since then what i’m talking about is a new build probably generally around 55 square meters generally speaking a two bedroom granny flat is what we build most of our clients build most of on their properties two bedroom 55 square meters with a deck and now this property also has a fence between it and the house it has its own private access it has its own private little courtyard or yard space as well and is also a completely separate tenancy from the front house so you’re looking at separate water separate electricity separate tenancy agreements for the property so i just want to make the distinction there between the old cockroach infested granny flat and the new style new build granny flats which are really i guess more akin to a two bedroom unit or a smaller two bedroom unit with a deck so the deck is effectively the balcony of the two bedroom unit and then you’ve got a yard as well so it’s kind of a two bedroom unit with a yard so when looking at okay who is actually going to rent these i just want to have that distinction in mind so who is going to rent the granny flats now there is actually a broad spectrum of people that rent these granny flats not everybody wants to live in a big house not everybody wants to have the maintenance of a yard people do want to live in a nice smaller new build desirable housing so grandpa’s don’t only because they’re on the cheaper end of the market it’s normal to think okay there’s only appear to lower socio demographic people but that is really not the case you have single people who likely be in these granny flats you have couples who might be saving for their first property or who just don’t want to spend too much on rent or who aren’t going to be home as much you have flying fly out workers you have older people or people who have been through marriage bust ups where it might just be one of them looking to rent a property so my father in law actually rents a granny flat in sydney and he would be an amazing tenant to have not only is he financially stable but he is a carpenter and a handyman as well so not only can he help fix the problems that happen on the granny flat but i think he actually rents from an older lady who owns the front house so he can help her out as well so he’s like the perfect tenant from a grant for a granny flat just this sweet you know he’s not even that old but he’s just a sweet kind of man in a good financial position but he lives by himself so he doesn’t need something grand he doesn’t need a big four bedroom house or anything like that so providing this affordable housing and remember these granny flats or new build as well so the quality of these is really high so they tend to attract attract a lot of quality tenants as well so in the brisbane market which is where we tend to build most of the granny flats if priced correctly depending on the area they tend to be priced around the 282 maybe 310 320 mark if price correctly we’re actually getting a lot of people through these granny flats and the majority of granny flats depending on the time of the year i only need one weekend in order to let them ben had a granny flat i forget now exactly how many people walk through it but there’s something like there was 15 or 20 or something groups that came through on the first day got multiple offers or multiple applications for that property and was then able to pick and choose from the best tenant talking to ban income tend to be around the 50 to $80,000 mark for these people and generally the length of the tenancy while it’s still quite in its early days in southeast queensland you’re kind of looking around maybe an average length of tenancy from about 18 months to three years and when someone moves out again it’s quite easy to relax that granny flat and one of the cool things about having a granny flat is it’s a second income on the property so when someone does move out and is vacant for that short period of time until you find someone else you’ve still got the income from the front house or if someone moves out of the front house you need to relate that you’ve got the income from the granny flat so don’t be afraid that granny flats only rent to poor quality tenants or that your granny flat is going to stay vacant for ages i guess the one caveat to that is you need to look at the vacancy rates in your area and if there’s going to be the demand for this product in your area and if it’s going to be a worthwhile investment for you so you need to look at your investment portfolio the property itself what your financial goals are and whether it makes sense for you to actually build a granny flat let’s say you have an amazing waterfront property in sydney that’s worth multiple millions of dollars let’s say you want to put a granny flat in there but the granny flat is actually going to be in the backyard which is actually the waterfront so the granny flat is going to get the waterfront which means the big house no longer has access to the water okay that could definitely be a situation where putting in a granny flat could hurt your rental income could definitely hurt the valuations of your property but if you just got a standard property with a good size backyard if you can put a fence in that is going to give the house fill its own good sized backyard granny flats going to have private access then you’re probably not going to have any issues if you’re in an area where the vacancy rates extremely high and it’s very hard to rent properties than adding a granny flat in that area that area might not need that granny flat so it may be harder to rent out and you may not get as many applications but in southeast queensland in like north brisbane where we’re renting out a lot of these granny flats vacancy rates it’s completely under supplied some of these markets you’ll hear vacancy rates below 1% so adding in a granny flat the granny flat then becomes the only nice affordable option in the area the only other affordable options are super rundown houses which no one really wants to live in or maybe a unit or something like that so providing this unique brand new low income option tends to attract a lot of desirable tenants so who rents a granny flat there are so many different people who are open and looking to rent granny flats too don’t be afraid of it obviously speak to your property manager about whether granny flats could work for your area or if you’re interested in whether a granny flat might work for your property whether you got an existing property or you’re looking to invest and then build a granny flat go to onproperty com au forward slash granny yeah that’s right for sas granny gra and ny go ahead over to that page to check it out you can learn a bit more about granny flats over there and if you want to talk to someone about whether a granny flat may work for you and your investment portfolio then there is an option there for one of our team to get in contact with you and to see if this could potentially work for your investment property to get julie income from your property to get some positive cash flow coming through there so go to onproperty com au forward slash granny to learn more about that i wish you the absolute best in your investment journey until next time stay positive