Approvals can make a difference
In order to get it approved, you’ll have to go either through local council or through a certifier, or potentially both. If it classifies as a secondary residence it has different kinds of rules and regulations then it does if it were a garage or a shed. And if it’s classed as a garage or a shed, you technically can’t rent it out and you can’t live in it, you could really Airbnb it like a room but it’s not meant to be a liveable structure. So a liveable structure ultimately is an extension or a sleep out.
So there’s a couple of different ways of how you can get a granny flat or secondary residence approved. And obviously, the primary way and the most efficient way, especially for an investor is to get it approved as a secondary residence.
It does mean you need to comply with all of the rules and regulations in your city and with your council. In ACT we have to comply with all of the disability rules and regulations for ageing in place, which means that you have to have it be a certain size, have to have certain distances e.g. like around beds, in bathrooms and around the living area. There are lots of different rules that you need to comply with.
You can have a secondary residence separately metered for the electricity. With electrical meters, you can put solar on in future and that definitely is a benefit. You can put water dials on your secondary residence. It also helps to gauge an understanding of what the main residence has used, and then what the secondary residence has used.
Once approved as a secondary residence and can be rented out with an agency, and you can rent out the secondary residence and the main residence if you wish. That means the agent can then sort out the electricity bills and the water bills based upon the usage.
Parking spaces for tenants
As a secondary residence you need to provide three car spaces; two for the main residence, one which has to be undercover and the third needs to be 3.8 meters wide. So that you can park there with a particular vehicle that will allow a wheelchair to get in and out of it or off its roof. So it needs to be 3.8 meters wide and it doesn’t matter if it’s undercover or not undercover as long as there’s enough space behind the building line.
In the ACT the building line is usually six meters behind the water meter in your front yard.
Maximise rental yield
The next tip would be to rent out your property fully furnished in order to increase the value and charge more rent. Especially Airbnb, In my personal experience I had a construction company airbnb my rental property, and they wanted everything done for them, they even wanted a cleaner.
Even renting it out long term for certain people, I have found that they actually want pretty much everything there. They can pay a higher rent and it’s much easier when people are moving from overseas or interstate to our city. It makes it handy for them not to have and purchase fridges, washing machine dryers, lounges, TVs, obviously they can choose what they want to keep and what you might take.
Appraisals
The last thing that we’ll touch on is some of the rental incomes and finance. In our experience we have found it more beneficial to ourselves and our clients to go through an agent, get an appraisal and ask how much your secondary residence would rent out for per week.
An appraisal can also look good to a bank if you are going for finance as they can see it as an investment and perhaps look at the best deals for an investment loan to build your secondary residence.
As an investor It’s a good idea to ask/ seek financial advice from professionals about your current situation and circumstances.
There’s also a plethora of other information to learn.
Please note, we are not financial advisors, legal advisors or accountants, therefore best to get the right people who are experienced in that, but we’ll definitely offer our experience where we can.
Any questions please contact our office on 1300 The Pod and we will be happy to answer any questions you have.
Written & video spoken by
Jacqueline Valk, Director
The Pod Canberra