The humble Granny Flat has been reinvented as the ultimate garden studio and has blossomed to become one of the most popular additions to the family home.
The ever-rising property market has certainly stimulated an increase in renovations and additions in recent years as the affordability of moving and upsizing has been under considerable pressure. At the same time, families have gradually had to change their lifestyles to accommodate more family members for longer. Young adults simply cannot get a foot on the property ladder and are opting to remain in the nest longer as they strive to save for a deposit. To give their mature offspring a little more privacy and independence, families with some space in their yards have opted to create garden studios.
Studios are fully self-contained dwellings – often of stunning contemporary design and high quality finish, adding significant value to the overall property. There are some restrictions involved, governing the building of garden studios. Rules vary slightly by state, but as a guide, your block should be a minimum of 450sq m and the studio itself must be limited to a floor area of 50sq m.
A beautiful garden studio has so many potential uses. As well as a haven for grown children, the studio can also be used for its historical role as home to elderly relatives, a home office or workshop, fitness studio, music room, a guest suite, or as an additional revenue stream, renting either to long-term tenants or as an occasional let through Airbnb or similar.
Whether you plan to build your studio as a single or double level stand-alone unit, an adjoining addition to the main house, or an apartment above a garage, it’s important to maintain a separate entrance – especially if you are planning to let the property. Also make sure that your design protects the privacy of both dwellers – in the main residence and the new studio. You don’t want to feel closed in and overlooked.
The trick is to make sure your new studio is in-keeping with the main home, presents a high quality addition, is easily accessible and doesn’t impact too much on the outdoor space.
So let’s talk about value.
What is the likely return on your investment?
Firstly, it’s a good idea to do your homework on property prices in your area – especially noting those with studios compared to those without, to make sure you don’t over capitalise.
You must make sure your building is fully compliant and that you keep all of your paperwork safe for when you decide to sell.
Property valuers estimate that a quality garden studio can add a premium of more than 20% to your sale price.
That said, if your home is in need of modernising itself, the studio will have less of an impact on the overall value. The rule of thumb here is to spend the money first on your main home before investing in outbuildings.
Principal Broker of Zippy Financial Group, Louisa Sanghera endorses the notion of adding values and tells us, “Home owners can achieve a return on investment of around 20%, and change a negatively geared investment into a positively geared investment, helping to pay their mortgage off faster – and facilitate the purchase of further investment properties”.
Louisa advises “There are two common ways to finance a new garden studio – the first is to use equity available in the current property upon which the studio will be constructed – and the second is to utilise a construction loan. Getting a Valuation Report is a good place to start, which takes both current market values and a likely bank valuation into account.”
Assuming your home is up to scratch, your studio will not only attract a higher sale price but will likely have a positive effect on how quickly your property sells.
Should you decide to rent your space it could net you between $200 and $600 per week, depending on location and the quality of the building – which also makes a great selling point when marketing your home. The potential of rental income could be the difference between a buyer being able to afford your property or not.
Craig Blake, Real Estate professional of over 25 years, currently with Parnell Partners in Frenchs Forrest reports, “Depending on the size and specification of the studio, home-owners could expect to attract rental incomes of up to $875 per week”.
Craig also advises that “Some older home-owners, looking to downsize have opted to build a garden studio, which they have then moved into, renting out their main home”. Which is another innovative solution we hadn’t considered.
All things considered, it looks like Granny Flats (sorry, Garden Studios) are the way to go, if you have a little space to spare on your block.
And finally, here’s one we made earlier…
We created this new build, 2 level studio apartment, designed by Molina Architects, as a separate dwelling to the existing home on a large block, demolishing an old garage to create the space. In this case, the studio was built to accommodate the family’s older son, but was designed to attract maximum interest as a source of rental income for the family in the future.
Talk to your local planners for more information, or talk to us at Sydney Beach Homes and we’ll be more than happy to explore some options with you.
Our thanks to contributors:
Louisa Sanghera, Zippy Financial Group www.zippyfinance.com.au
Craig Blake, Parnell & Partners www.parnellpartners.com.au