Ideas for renting out backyard studio/granny flat

ar993 on 17/03/2017 - 12:17
Last edited 17/03/2017 - 14:02

Hi All.

I've recently bought an investment property located in Werribee, VIC. It may not be well known for its 'reputations' but hey, it's under 30km from the city and properties are still affordable out there (i.e. potential for price growth).

It has a 5m x 7m studio apt which is brick-made, in the same structure / under the same roof of double garage, separate from the house and located in the backyard. It has toilet but no shower, a kitchen sink but no kitchen benchtop, a carport that is an extra one on top of double garage the house already has. The house is a four bed brick-made one and renovated. Being a corner block, the house also has side access to the backyard/studio. Backyard is all concreted.

In order to make it rentable, I will need to install a shower, have to buy an electric oven/hotplate for cooking facilities and possibly throw in an electric heater for winter (aircon will be too exp). I may put a fence to give the pargola of the main house some privacy.

Ideally I'd like to rent out the studio separately to get extra rental income, but don't know what to do with water and electricity bills. The tenant in the main house will possibly not agree to share the bills since they would not know how much the tenant at the studio is using. On the other hand, separating meters for water/electricity may cost quite a lot.

Not keen on spending too much since I may end up building two units at the back (STCA) demolishing the garage/studio after a couple of years, if I have enough $$ to keep bank happy. The block is around 800sqm.

Does anyone have an idea how much it may cost to separate the meters?
Do I need to get council permissions to rent out the studio?
Any idea what I can do to maximise the return from the property?

Any ideas/advice would highly appreciated.

Thanks :)

Home & Garden

Comments

  • bighead on 17/03/2017 - 13:59

    Congrats on your purchase.
    Regarding a separate dwelling at the back, you may (or may not) need to apply with council.

  • alz on 17/03/2017 - 14:34

    Renovate the granny flat and rent it out. Extra $$$$$$$. Speak with your council to suss out if a DA is required. Smart thing to do if you're Sydney metro but I'm sure its the case everywhere.

  • benderz on 17/03/2017 - 14:41
    +1

    Last rental was several units sharing a meter so the landlord was responsible. I guess it was just divided between the units. By all means, look into getting it seperated but I think it would be better to estimate usage and add it to the rental amount.

  • try2bhelpful on 17/03/2017 - 15:55

    Was I the only one that thought Meth Lab?

    Seriously, before you do anything with it I would investigate the option of including it in the original rental as an extra bedroom for a teenager, as an onsite consultation room for an accountant, etc. That way you probably don't have to do anything significant to it. You might have trouble trying to rent it out separately because the people in the house might not like sharing the property with others - it would certainly put me off renting a place if I had to share. Talk to some rental agents and see how they think this place could be best positioned.

    • airzone on 17/03/2017 - 16:54

      Not a bad idea. Quite a few houses in my area operate business out of their garage.

  • mskeggs on 17/03/2017 - 18:07

    If you rent out a granny flat you will be aiming to get rent of $5 -$10k per year, maybe more.
    If you skimp on things that make the place nice, you will get a poorer class of tenant.
    Spend the few $1k to do it properly and enjoy the substantially higher combined rental return.

  • Euphemistic on 21/03/2017 - 15:36

    Make the rent water included. AFAIK Tenants are only charged water usage anyway, how much water can a granny flat really use? Work out the total bill, add 10-20% of the water usage to the rent.

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