Force value in any market with a renovation/ granny flat package!

No time for renovation? Then look out for someone to renovate and add a granny flat for you! Every investor wants to attain capital gain and positive cash flow, but did you know you can create it in any market? Here is a fantastic new idea for anyone with property in NSW- particularly if looking for positive cash flow.

If looking for a simple value adding technique for your investment then the NSW Government has made it exceptionally easy and quick to add a granny flat to your property with its new Statewide Planning Policy introduced recently, aimed to boost affordable housing supply. Within 10 days you can have your Granny Flat plans approved, in all residential zones and in just a few months it can be totally completed.

This is extremely exciting news for property investors seeking positive cash flow and high capital growth in the one investment!

Currently there are many properties in Western Sydney with a fantastic supply of exceptionally affordable houses (around $200-250K) with huge potential to apply an add-value strategy for little cost. For example if if you currently research Sydney’s booming Western Suburbs and look for the right kind of deal; you have a prime opportunity to force value in any market and as Sydney’s West is currently sitting in a rising market it there is an exceptional opportunity to snap up an amazingly affordable bargain in an upswing cycle.

For example you can buy a three bedroom house plus garage, on a generous 638sqm block, 15km’s to Penrith and 50km to Sydney’s CBD within the low $200,000’s! The key to forcing value and growth is you would be looking for a property with a current garage detached or separate garage that could potentially be converted into a granny flat – for minimal outlay.

The investment idea behind this purchase is to renovate the existing house and also convert the existing lock-up garage into a studio styled flat; thus creating a dual income earning property and greatly investing the yield. Therefore to put it simply as an example package:-

  1. Purchase the property at a 5% discount from the asking price at $218K
  2. Add a renovation of $50K, including the exterior, interior of the house and conversion of the granny flat – therefore making the entire package $268K
  3. Then rent the house for approx $280pw and the granny flat for $200pw – making a total of $480pw in rent and making this investment after the renovation, a very rare positively cash flow property with gross rental yields of approximately 9.1%!

The reason this type of investment is so popular to investors is that it is a low risk investment; a personally tailored, exceedingly rare, renovation investment package!

It offers an opportunity for an investor to snap up a positively geared renovation package in an area with high capital growth potential – a very rare find where an investor can attain both high yields of approx 9.1% gross and high capital growth! Therefore this investment is so popular is that is forces value through three strategies – where if one strategy doesn’t work the other two will i.e. renovation, add-value through renovation and purchasing in a capital growth corridor .

Western Sydney can expect exceptional capital growth drivers due to a number of factors including:-

  • The $450M development in Penrith - with enormous amounts of government and private infrastructure spending proposed to surrounding areas including the Government approved $80M 3km Erskine Park/ M7 Link Road is expected to propel prices in this area
  • The new Delfin Estate with its brand new house and land packages being sold from $400K-$600K which will cause a ripple effect to the value of nearby areas; as supply begins to slim and development begins to increase in the immediate area.

With the numerous granny flat designs on the market, from studios to two bedroom designs, showcasing all the modern conveniences; air conditioning, modern kitchens whatever your decision; by adding a granny flat for as little as $50K-100K you can start collecting exceptional rental yields, which can greatly improve your serviceability or borrowing power as an investor. Whether it’s for a private sanctuary for parents or teenagers retreat, a home office, man cave, art studio, gymnasium or for accommodating elderly parents; the end result spells dual-key income which means instant added value for your home and as a property investor provides an exceptional additional source of income for very little effort.

If you wish to find out more read the NSW Government Brochure on building a granny flat. For general requirements and how to apply you can also see their fact sheet.

Jeremy Allen (National Channel Manager at Positive Real Estate) has been researching various investment strategies for 10 years. They have been in business for 7 years and have always “Learnt the clients situation and what they would like to achieve for their personal situations.” then they apply a “Teaching of the necessary strategies”, then an “Execution of the Plan”. Visit www.positiverealestate.com.au for more information.

8 Responses to “Force value in any market with a renovation/ granny flat package!”


  • Great way to get ahead. Two incomes from one property by creative investing. Thanks for the info.

  • Great idea. Never been to keen to buy in western sydney though. But the idea can translate to anywhere.

  • That’s right Lyn. It really comes down to where Australia sits right now with regards to population growth and housing supply. The trick is to find a council that is pro higher density housing (without the cost of development) and be creative with it. Good luck with your investing Lyn. All the best. Jeremy Allen.

  • Hi Bob

    Thanks for commenting.

    Look, the fact is that, it doesn’t matter where it is, as long as the numbers are stacking up for you now and the long term.

    I am from Sydney, and it is funny to see how Sydney people feel about investing in various parts of Sydney, yet, people from other states don’t really care and do very well out of it. It all comes down to taking the emotion out of the investing and looking at the figures. Do you buy a share based on the colour of the paper it is printed on? However, you are right. As from my response to Lyn above, it is just a matter of finding a council that is pro higher density and copy and pasting the strategy there.

    Goo dluck with it all.

    Head not heart

    Jeremy.

    Jeremy Allen

  • If you are thinking of renting out a granny flat, it is important that you understand that it falls under the definition of “affordable rental housing” because New South Wales and other States have initiated policies to encourage granny flat rentals while at the same time taken steps to ensure that they are built in an acceptable manner.

  • Wow that was strange. I just wrote an really long comment but after I clicked submit my comment didn’t appear. Grrrr… well I’m not writing all that over again.
    Anyways, just wanted to say great blog!

  • Granny flats often include amenities such as kitchens, universally designed spas, and more. I think it is good to have a granny flat in your house. It provides some great advantages. Thanks.

  • First off I want to say excellent blog! I had a quick question in
    which I’d like to ask if you don’t mind. I was interested
    to know how you center yourself and clear your thoughts prior to writing.
    I have had a tough time clearing my mind in getting my thoughts out.
    I truly do enjoy writing but it just seems like the first 10 to 15 minutes
    tend to be wasted simply just trying to figure out how to begin.

    Any suggestions or hints? Many thanks!

Leave a Reply