Case Study: Redbank Plains
Another great story from Ipswich Granny Flats, the Granny Flat Experts…
OVERVIEW:
- Investment property purchased March 2015
- Sloping land to the street
- Full street frontage on a 838m2 corner block
- Existing 3 bedroom cedar look house built in 1980
- 30.6.15 Unimproved Capital Value (UCV) land $142,000
DETAILS:
These Sydney investors were looking for investments that were either neutral or positive cash flow and engaged the services of a Sydney buyers agent to find such an investment for them. The only way to achieve a positive cash flow in this instance was to put a granny flat (auxiliary dwelling) in the large backyard.
Our architect drew up a number of concept drawings and a design was finally settled on. The yard space where the proposed granny flat was to be built was already separately fenced, making the build abit easier for the existing tenants in place in the main house. We ended up with a building envelope of approximately 20m x 12m – this allowed us to build a 50m2, one bedroom granny flat, covered alfresco area of 4.4m x 3.1m and due to the slope of the property a stand alone carport with council approved relaxation to the front boundary. And still managed to retain the large mango tree in the front left hand corner. All in all, a great result for the small space and sloping block!
Approvals in place, building work commenced July 2015. Check out the photos of the build in progress.
A week out from the final completion, Julie Adams (Co-Director and Manager of the Property Management Division) advertised the granny flat for rent and within the first 24 hours had three great applications for the property. First in best dressed, with two very disappointed prospective tenants! As we were in the process of building two more granny flats in Booval, Julie was able to show these and so now we tenants ready to move into them once they are completed early December 2015! Great result for these investors.
The numbers look like this :
TOTAL SPACE:
|
Granny Flat: |
50m2 13.64m2 |
|
| Total Area: | 82.84m2 | |
| The numbers look like this: | ||
| Purchase Price Stamp Duty + Legals |
$263,000.00 $9,455.00 |
|
| Total: | $272,455.00 | |
| @ $290 pw rent = 6% rent return | ||
| GF Build Professional Fess & Charges – Approvals Landscaping |
$127,976.00 $8,465.00 |
|
| Total: |
$140,391.00 |
|
| @ $250 pw rent = 9% rent return | ||
| TOTAL PROPERTY COSTS | $412,846.00 | |
| Main house (current rent) | $290pw | |
| Granny Flat (expected rent return) | $250pw | |
| Total rent | $540pw | |
| Rent PA | $28,080 | |
If you average out the two rentals 6% + 9% = 15% / 2 = 7.5%
7.5% RENT RETURN ON UNDER $415,000
You’d have to be happy with that !!!
SUMMARY:
Awesome rent return on a great investment property purchase, and a cost effective granny flat build!
We have had a number of buyers agents now look at our granny flat product – and they all say the same things : the best granny flats we have seen to date. The best design, quality of workmanship and total end product including the landscaping and professional photos for each of our projects. It is all about good design, and the great team behind it!!
Are the investors happy – you bet! And so doing it again…
Ipswich & Logan Granny Flats
The Granny Flat Experts
