There aren’t many people that haven’t been affected by consecutive increases in interest rates or cost of living increases. Whether you rent or own, it’s becoming tougher for everyone to cover increasing costs. In the past, many people have turned to picking up a second job or starting a side hustle, but that may not be cutting it now – for many, we’re spending more time working and less time enjoying our home and family life.
With mortgage holders starting to feel the effects of continuous interest rate rises combined with the rise in the general cost of living, many are looking at alternative options to bring in some additional income by utilising their current properties. Add in a general shortage of rental properties across the country, granny flats and other creative living solutions are becoming popular with both homeowners looking to make money and renters looking for a place to live.
Popular Creative Property Solutions
Due to the increasing costs of mortgages and cost of living, there are a number of creative living solutions that people are starting to turn to.
Short Term Rentals
Whether it be offering a room for a few months or offering your house for a weekend, short term rentals through AirBNB and the like are becoming a popular way of increasing income and covering growing expenses.
Something popular with the younger generations, share housing is now becoming a solid option for those looking for long term housing. Homeowners are renting single rooms in their houses, often with utilities included. It offers an affordable solution for renters and can help to cover the costs for homeowners.
Green Living Solutions
We know that electricity costs are increasing, so many homeowners are looking towards green living and sustainable changes they can make to their home to save money in the long term. Changing light bulbs, installing solar, and utilising smart technology are all ways that are currently being used.
Mixed Use Properties
Homeowners with additional storage space are finding ways to make additional income through renting out their sheds and garages for storage. It’s a great way to maximise use and value of the property, as well as gain some additional income.
Micro Living Spaces
For homeowners who have some spare land space, granny flats are becoming a popular addition to the home. They are an affordable solution and provide a small home that can be rented out for additional income.
Why Build a Granny Flat?
Building granny flats in Perth homes are a great option for permanent housing, holiday housing (AirBNB style) or for home office space. Let’s look at some of the reasons why Perth homeowners are choosing a granny flat builder instead of buying a space away from the home.
- Cost-effective – building a granny flat, whether it be custom or standard, can be a more cost-effective option than building a new home or renovating your current home. They tend to be smaller in size, use less construction materials and require less labour and time to build.
- Increasing property value – everyone wants the value of their property to increase, and adding a granny flat to your property can do that. They are an attractive addition to potential buyers looking for more space.
- Income producing – a granny flat can help you produce additional income whether that be through renting out the granny flat permanently or for holidays, or for using it as a space to run your own business.
- Environmentally friendly – because granny flats can be designed from the ground up, you can include energy-efficient elements including solar panels, insulation and more which can help to reduce energy consumption.
Working Out If You Have Enough Room for a Granny Flat
One of the biggest concerns for many people is whether they have enough room for a granny flat on their property. Unless you have a tiny backyard, there is a good chance that you can fit a custom designed granny flat on your property. Most standard designed granny flats start from around 40 square metres, but for those with an odd shaped yard, or looking for something different, a custom design allows you to design a granny flat that suits your home, the space you have available and your budget.
Can You Get a Loan to Build a Granny Flat?
When looking at installing custom granny flats in Perth, one of the most common questions people ask is whether you can get a loan to help you build the property. Generally, you are able to get a loan to build a granny flat that is self-contained and located on the same property as the main house.
There are several options available to homeowners and it is worth sitting down with your bank or a mortgage broker to look at all options available to you. Options available include a personal loan, to use the equity available in your current home or to take out a construction loan that is specifically for building the granny flat.
In the current economic climate particularly, it is important to shop around and find the best interest rates, terms and other loan conditions to get the best loan for your needs.
Saving Money on a Granny Flat Build
Keeping in mind those interest rates rise, there are certainly ways that you can save on your budget while still getting a quality build to help bring in the income. Here are our top five tips on saving money on your granny flat build.
- Choose a simple design: Generally, the more complex the design, the more it costs to build. If you stick with a simple design and standard appliances, you can save money on construction and fit out costs.
- Opt for cost effective materials: Chat to your granny flat builder about more cost effective materials such as modular panels. These can save both time and the cost of materials.
- Shop around: As with anything, talking to different builders and suppliers allows you to get multiple quotes to select the best option for your budget.
- Set a budget: Talking budgets, once you have your quotes, set your budget and stick to it. You can always upgrade or add on later if you find you are missing essential components.
- Plan ahead: Don’t rush into a build. Take some time to plan ahead, ensure all building approvals are covered and ensure that your budget covers everything you may need, plus any additional incidentals.
Saving Money and Maximising Income
We’ve touched on how you can save money on actually building your granny flat, but if you’ve gotten a loan for the build, how can you save money on that, while maximising the income?
Let’s look at the saving money side first, because there are a few ways you can minimise how much extra you need to spend on your loan.
Make payments more often
Paying fortnightly, or even weekly means that you can make at least one extra month’s payments each year, which minimises interest and sees you pay off your loan quicker. Just make sure you have a loan you can add extra payments to.
Increase how much you pay
If you can afford to pay more on your loan repayments, this is another great way to lower how much interest you need to pay, as well as decrease how long you have the loan for. Make sure you know the outgoing costs for your granny flat and see if you can factor in paying more.
From saving money to maximising income, here are four ways you can increase your income using your granny flat.
- Rent it out – with a severe shortage of rental properties across the country, you shouldn’t have too much trouble renting out your granny flat if you live in a desirable area close to the facilities that people need.
- Holiday rental – if you live in a holiday location or a bit further out of the city, you can advertise your granny flat as a short stay holiday rental.
- Use it as your office – if you work from home or you are looking to start a business, having a quiet space to work and run your business from can help to increase your income.
- Storage space – sometimes people just need some additional storage and with storage sheds often hard to come by, being able to rent a secure building to store their belongings while on a long holiday or until they can find a permanent home is attractive.
While building a granny flat may seem like a lot of outlay initially, particularly when general costs are rising, there are certainly benefits, both short term and long term, of adding additional living space to your Perth home. If you’ve been wondering how you can increase your income, and think a granny flat is a way to go, take the time to chat with Superior Choice Granny Flats. Our experienced team can help you find the right option for your budget.