Homeowners with backyards are using granny flats to keep adult kids at home, build man-caves and “she-sheds’ and to generate income by renting it to travellers.
Research by Gateway Credit Union has found that one-third of homeowners are considering a granny flat, and another 22 per cent are open to the idea.
“There are plenty of granny flat builders and, as with any construction, (you need to) research the options well,” he says.
“It was to keep the family together,” she says. “We knew the girls wanted a little independence and we do have a nice large block of land.]
“It’s been an absolute blessing.”
“Generally it’s on the same title, so it creates a bit of murkiness,” she says. “There’s more to think about than a stand-alone property.
“If people are using it as a rental property, it’s the same as any other rental property. Look after it in a professional manner, have a property manager do inspections and make sure you have insurance.”
Some states allow people to build a granny flat for financial gain, while others are reviewing their laws.
Gateway’s Thomas says Australia has the second-largest AirBNB market behind the US. “People have really seen the value of their backyard and seized the opportunity to provide travellers with an alternative to expensive hotels,” he says.
Thomas says when it comes to financing granny flats, people can look at borrowing more from their existing lender, but be watch out for extra costs.
“Lenders will often charge a higher rate if the property is to be rented or used as a business premise,” he says.
“The other alternative is a construction loan. These are paid in stages so borrowers can draw down the money they need, as they are building, and therefore they don’t pay interest on the whole loan from the start.”