Manor Houses – Investment Tips

Manor houses are two-stories in height and contain three to four dwellings in the one building depending on the size of the space. In most cases, manor houses have a common entry and provide affordable housing in medium density areas. For this reason, investing in properties such as manor houses, which is a form of low rise medium density housing, does have many benefits.

Know your why

Even at the start of the project, you should always understand why you plan to buy and build manor houses or develop already existing properties. From this basic premise, you can then plan your strategy accordingly. Your strategy will lead to a investment plan which will help you formulate many of the decisions along the way and enable you to better determine location, budget and ultimately your financial expectations.

Fast Track Approval

One of the most significant advantages for investing in manor houses is the fact that with the NSW Low Rise Medium Density Housing Code, builders can apply for fast track approval through the Complying Development Certificate (CDC). Under the new standards, approval can be gained in as little as 20 days to begin building. Of course, there will be added complications and delays if you find your plan does not meet the national standards.

Affordability

Placing three or four dwellings on the one block of land will help divide the costs and bring a better return on your investment. Whether you intend to live in one home and rent the others out, or sell them in their entirety, there are plenty of opportunities to build on and increase your investment. Always know your budget and allow for unforeseen contingencies.

Location, location, location

While you may be keen to snap up land going on the cheap, understand that building manor houses close to public transport, parks, schools and shopping centres will always be ideal for your renters-to-be. Consider growth suburbs in various neighbourhoods and those areas which are demonstrating signs of redevelopment before you make your decision. Download suburb reports and use online research tools to help you find your ideal property.

Functional accommodation

If you plan to rent out apartments in your manor house, then aim for functional accommodation without unnecessary luxuries. Spend your money wisely paying particular attention to kitchens and bathrooms which can increase your cash flow. Keeping it fuss free will help keep your costs down especially if you are still paying off the mortgage from your own home. Aim for simple and classic designs that will suit the more mainstream rental market.

Be prepared

Never jump into a manor house development without doing your homework or due diligence. Basing your business decisions on your heart rather than your head can prove to be risky. Speak to the experts and be fully aware of how you can develop the property and increase your financial growth. Utilising a qualified property accountant and a mortgage broker is a great place to start. Understanding both the tax implications and the availability of property loans is in your best interest.

Terrace Houses – Investment Tips

Terrace houses are mainstay features in Australian cities such as Melbourne and Sydney harking back to the Victoria and Edwardian periods of the 1800s. Back in the day the narrow-sized terrace houses were seen to be a great investment and enabled investors to maximise the returns on the available land on offer. And the keen interest to invest in terrace houses, period or otherwise, still remains in modern day Australia today.

Government Changes Work In Investor’s Favour

Thanks to the recent changes by the NSW Government in relation to the Low Rise Medium Density Housing Code, fast track approval can be granted on terrace houses through the Complying Development Certificate (CDC). Provided you meet the government guidelines in terms of your land size and prospective terrace house plans, you should be able to seek approval on your next terrace house project in as little as three weeks. This shortened timeline makes the whole process more efficient and ultimately more cheaper from start to finish.

Be Aware of the Updated Guidelines

For those looking to invest in building projects in zones R1, R2, R3 and RU5 and aid in the affordable housing shortage, terrace houses with the updated lower minimum land requirement may just be for you. If the block size is a minimum of 18 metres wide and at least 600 square metres (or the minimum lot size in accordance with local council), the necessary approval can be sought quickly and easily. Remember that each dwelling must face the public road and no terrace house can be situated behind a second dwelling. For more information on the CDC guidelines, visit the NSW Government Planning and Environment Website.

Know your End Game

For investors seeking a retirement nest egg or looking to build upon their property portfolio, terrace homes are seen as a viable option. It allows you to not only provide a home for yourself, but it gives you the opportunity of having up to two properties to rent or sell when the time is right. As long as you stick to your budget, weigh up the pros and cons carefully and are purchasing in a growth area near to schools, local shops, restaurants and public transport, getting on the road to financial freedom may be easier than you think.

Be Diligent with your Research

Investing in terrace houses needs to be done on more than a hunch, and you can’t just buy a property because you like it if it is not going to help your investment grow (unless you are independently wealthy and investment growth is not your aim). Research the area in depth to source the best location for your needs. Seek tax and mortgage information from the experts and aim to get a pre-approved loan before you sign on the dotted line. Chat to architects about ideas for cost-effective floor plans which will help see your terrace house project come to fruition. Backed by your research, you will be able to decide how next to proceed and avoid projects which are going to be a drain on your resources.

Granny Flat 101

What are the planning requirements before a granny flat can be built and do these vary by state?

There are planning permissions which are necessary to build a granny flat on your property behind the principal dwelling. Provided your granny flat meets the minimum requirements, it should only take a short amount of time for your build to be approved. All state requirements vary, although in NSW you should receive permission in as little as three weeks if you meet all the provisions listed in Schedule 1 of the AHSEPP.

In NSW, for example, the site area must be a minimum of 450 square metres and the maximum floor area of the granny flat must be 60 square metres. A Complying Development Certificate (CDC) will be issued immediately upon approval. If for some reason your proposed plans are not in accordance with the provisions in the AHSEPP, a Development Application will need to be lodged with your local council.

Always make sure you read through your state guidelines carefully in order that there are no delays in the timeline of your construction.

What is the average cost of building a granny flat?

The cost of a granny flat will vary depending on your specific requirements, but a budget for approximately $160,000 is generally an excellent figure to aim for. Of course, the number may be less or even more depending on how elaborate or straightforward your granny flat design plan is.

Speak to the bank and understand your budget before you begin to plan. That will help you realise how much you have for the build of the exterior, the design of the interior and the landscaping of the outdoor space.

In your experience, what are people tending to use them for?

The great thing about granny flats is that they can be used in a variety of ways. Homeowners are using them to house their ageing parents or adult children or just keeping the space available for guests during the holiday season.

Granny flats can also reduce the home/work commute by providing secondary or even full-time office space. And state depending, they can also be rented out to provide a second income.

Have you observed any granny flat trends of late?

As a company that specialises in beautiful and functional home designs, we are inspired by the uniqueness of contemporary granny flats, and we hope this continues. A granny flat need not be a one-design-fits-all, and you can really create something special to reflect your lifestyle.

More attention is being given to the outdoor area surrounding a secondary dwelling so those who reside in the flat can entertain as well. While space is more limited in a granny flat than say a full-size house, thanks to clever space-saving designs, there is no need to skimp and save on the necessities. We recommend websites such as Arch Daily, Dwell and Design Milk to stay up to date with all the latest in design trends.

How can people make money off them?

Granny flats can provide a rental income in New South Wales, Western Australia, Northern Territory, Tasmania and the Australian Capital Territory. South Australia, Queensland and Victoria are yet to allow the renting out of granny flats to generate an income although this may change in the future. If you plan to build and use your property to earn income, check your state rules to ensure full compliance.

On the plus side, even if you are unable to rent out your granny flat, considerable savings can be made if you choose to house your family members or even use it as a home office.

Dual Occupancy - Investment Tips

Dual occupancy homes are on the rise, especially as they create wonderful investment opportunities for homeowners and landlords. Not only can they provide accommodation for your family but you also get a separate rental income to help pay off your mortgage quicker or grow your nest egg. With an affordable property shortage in NSW, dual occupancy homes are only going to increase in the near future. If you wish to invest in dual occupancy homes, here are some great tips.

There is no one size fits all design

You can be as creative as you like with dual occupancy properties as they come in many forms. It could be what is known as a duplex or attached dual occupancy, two dwellings separated by a wall or they could be one home on top of one another. They could also come in the form of two separate free-standing houses which is termed a detached dual occupancy. Whatever the layout, all can provide rental opportunities or house your growing family. Because of the variety of designs available, you need to think carefully about what it is you want from the dual occupancy property both in the short and long term.

Have more cash than is necessary for the build

No matter how organised you are or how competent your builder may be, never underestimate how much the construction of a new duplex will cost you. Speak to your lender and have a solid understanding of your budget and ongoing cash flow. One of the things that can never be emphasised enough is to have more money than is necessary to make sure you can cover any unexpected costs or delays that may occur. Once complete, always be realistic about how much you are going to earn off the back of your property especially when renters are difficult to come by.

Be prepared for a faster turnaround on approval

Thanks to the new planning laws in NSW, you can now fast track your approval for dual occupancy properties provided your design meets the minimum or maximum requirements. So make sure you have everything ready to begin in anticipation of this as approval can occur in under three weeks, way less than the two to three-month average before the Complying Development Certificate (CDC) came into action.

Increase the value of your property with dual occupancy

Depending on the design of your dual occupancy property and your suburb of choice, it could be worth up to 30 per cent more than a property which is single occupancy. Dual occupancy properties are a great investment, particularly as they offer that second dwelling to provide a rental return. Smaller properties such as dual occupancy homes are in high demand for young people and retirees who are looking to downsize. If you are planning on renting out one part of your property, it is wise to never fully rely on rental income to cover the bulk of your expenses.

Keep up to date with the latest rules and regulations

Make sure you visit the NSW Government Planning Portal to keep abreast of the latest Complying Development Standards (CDC). As it currently stands, blocks must be at least 400 square metres or the minimum lot size according to your local council, and at least 12 metres wide. Where one dwelling resides on top another, the block must be at least 15 metres wide. Buildings must have a minimum side setback of 0.9 metres, and each dwelling must face a public road. Each dwelling must also have at least one off-street parking spot.

Research your choice suburbs before you commit

While you may be keen to buy the very first property you visit, research will keep you clued in to potential growth areas. If it is your intention to rent, then make sure that there is a strong demand in the area and that properties are close to public transport, shops and schools. While this may not be your personal priority, it will ensure your dual occupancy property will keep the renters interested. Due diligence is always necessary to ensure you are making decisions based on facts.

Speak to the experts

Builder, designers, realtors, accountants, mortgage brokers and lenders are all knowledgeable when it comes to property building and investing. Speak to the experts and ask questions, so you understand every part of the process. Poor communication, misinformation and failure to follow up on things will only give rise to problems, regardless of what stage of the process you are at. Seek unbiased information from those who know their trade before you commit. Never trust an expert if it is in their best interests for you to proceed without conducting your own form of independent research to back it up.

What is Multi-Dwelling Housing and Tips to Tackle It?

Multi-dwelling housing or multiple dwellings may not be your first thought when you mull over investment or property ideas, but they are necessary in the scheme of things in higher density areas. Multi-dwelling housing tends to refer to properties such as apartments and units, many of which provide all the necessities that a full-size house can bring to the table.

Confirm Minimum Requirements and Specifications

Before you go ahead with the purchase of your property or your building plans, it is necessary that you double check all measurements to determine whether the size of the property and frontage meets the minimum specifications required by your local government. There are strict rules and regulations in each Australian state to make sure that all building guidelines are met.

Finance May Be a Serious Hurdle

Despite all your well thought out plans, try not to get your hopes up on a possible property venture before you have spoken to your bank or lender. Seeking development finance for multi-dwelling housing can be tricky, and even near impossible, for those without previous building or construction experience. You may find that the banks will not even consider you for such a project without a solid track record behind you.

Do the Math

Building is complicated and stressful without a doubt, but multi-dwelling housing can bring issues that single dwelling homes don’t even have to consider. Make sure you understand this before signing on the dotted line. You don’t want to see your potential profits eaten away by a myriad of unexpected issues. And don’t forget to take into account the GST if you wish to sell. Forgetting to take this into account will guarantee your costs are underestimated and your profits are reduced. A property development accountant can assist you in these matters, so you are fully educated. It is important to understand that in some cases the return on the property may be even less than initially realised, so enter the project with your eyes fully open.

Build a Great Team

In larger scale building projects, it is crucial that you set yourself up with a knowledgeable and experienced team to help you fill in the gaps and ensure your project can get off the ground without issue. Backed by those in the know will ensure you are one step closer to success.

Do Your Due Diligence

Understanding the risks that may occur on a multi-dwelling housing project is crucial to its success. It is only then can you ensure that the risks are minimised at the very least or eliminated in their entirety. You may wish to consider a conditional contract of purchase to take into account planning permits or a builder’s estimate. Due diligence on all aspects can never be underestimated.