Granny Flats for Extra Income -Existing Residential Home 3 Bed, 1 Bath

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Attracted by price and location, this was a pretty unflattering ‘70s lowset bungalow where the current owner had completed a cosmetic and rather average renovation. I liked two things about it; One: the home was built all the way to one side leaving a large side and rear yard, and two: the real clincher was that the property was walking distance to the main coastal town and fronted the river. This made the purchase price very attractive as I saw great long-term upside. Things are always cheap for a reason though, and here the river was fringed with mangroves – meaning mosquitos, but the biggest issue was the street. It could be best described as a low socio-economic neighbourhood full of very cheap units mainly for rent and some older dwellings.

There were very few owner occupiers in the street and this tends to drag ‘pride’ and presentation in homes down in the collective. Furthermore, there were some cheap, government owned rental properties in poor condition and they attract a certain crowd. So, if we could renovate the whole street and build high quality homes, taking advantage of the riverside, then we would quadruple our money with nearby riverside blocks selling over $1 mil, and even canal sites upwards of $700k (just for the land). But this wasn't going to happen, in the short term at least. The solution? We obtained approval and purchased a pre-built granny flat to drop into the large yard and then separated it from the main house by an internal timber fence, so we now had 2 homes returning >$600 per week for a total investment under $500,000, cash flow positive! This allowed us to wait for the inevitable incoming tide of gentrification to this well-located riverside street.