Why Granny Flats are NOT a Good Property Investment in Australia #shorts

I don’t really like granny flats. ❌

Not for investors, anyway.

🏡Investors buy an old house on a decent block and plonking a granny flat in the backyard to increase the rental yield. At face value, what a GREAT idea.

BUT, rent gives you an income and cash flow, but it doesn’t build wealth. Plus you have to pay tax on it.

In many cases, adding a granny flat to a property is like sewing a 5th leg on a horse and expecting it to run faster. 🐎

Capital growth is what BUILDS wealth. And the secret to capital growth? Buying an asset that many people will want when you go to sell.

👇LEAVE A COMMENT BELOW and share your thoughts. Do YOU think granny flats are a worthy investment?

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[raffaeledeflorio]

It’s true, it really holds no extra value to the property but in some cases it helps the investor with extra cash flow to pay the mortgages.

[dalingdingaling]

This doesn't make any sense. If you have the land, you can return about 11%. If you have 120 to 150K, you're way better off having a granny flat than getting into another 600K+ in debt

[svenerikmoeller]

Umm, bought two properties with granny flats in n the Blue Mountains for 1.92 million and now receiving $1920 weekly rental yield thus a 5.2 percent yield compared to average blue mountains property of 3.36 percent.
Frankly this gives me far more opportunities to further my portfolio then if I bought stand alone properties.

Another thing is that there is a greater demand up here for granny flats due to the lower rent, I just hope that the government will allow for more then one granny flats per property to be built.

[zaydmuminuun]

I am curious, with a large enough property usually a semi/ detached home is called a ‘guest house’. I feel as if the design and placement is done well enough you can market your ‘granny flat’ as a ‘guest house’

[Churchoss]

Sorry but this isn’t true. If you hold a house valued at say $750, 000 and you’re repayments are $700 a week, and most houses to rent in Sydney are between $350-$900 you then build a granny flat for $150k getting between $375-$490 in rent from that

You’re then making an average of $1, 050 a week in rent causing your property to be positively geared and some on top to put back into the loan paying it off faster thus reducing your interest long term. Not to mention in 1.5-3 years time when inflation hits like it always does, you re assess and find out your property is now worth an extra $300, 000 due to inflation alone and now an attached or detached granny flat. It adds overall value as there’s two sets of income and they’re cheap to build, this makes no sense to steer people away from using one bit of land for two properties, yes there’s income tax on what you make but at the same time, tax is attached to most things in life and there’s ways around it if you know what you’re doing to offset it. Come back to me in 5 years when most young people in Australia can’t afford a single house and rent forever in a granny flat. 🎉