Hello,
I am soon to settle on an IP purchase in Birmingham Gardens (Newcastle). I felt I paid good price for property, currently negatively geared but want to make it cash flow positive through Student accommodation and Granny Flat.
If I move very quickly it is likely that I can build in time for the student year - March - Dec. Current Tenants lease also runs out at about this time, so it feels timing wise that I should make a move now. The income it generates will help my overall portfolio position. My only concern is the current tenants freak out and leave or demand a massive rent reduction.
I am getting bogged down with a number of choices I have to make between 2 - 3 bedder, positioning on the block, investment return and concerns of how it may impact the value of the property.
As you can see in the attachments it is a corner block. In effect if I put up a dividing fence the block could look subdivided. There is enough grass area remaining for the main building to have a mini backyard.
I spoke to the rental agency and they suggested a three bedroom in general is more attractive for a family and potentially greater income if leasing to students.
I have attached drawings of the two proposals.
1) 3 bed 60 Sqm, will leave about a 1.8m gap from the main building (which has an extension on it. this makes me nervous as i wonder how sunlight may be blocked to the back of the house and also for the feeling o the two rooms in the extension view suddenly become a fence or the side of a granny flat.
There is also floor plan issue with no easy access to a backyard for the granny flat.
- Cost is likely to be $122,000 (all inclusive, with demolition of current garage)
- Rent, conservatively $320 - $360pw for the house rented to a family. For students maybe $150 - $160 Per room =$450pw
2) 2 Bed 60 Sqm, provides a much bigger space between the house - 3.18 meters. Has a nice layout with two toilets (Overkill) but direct access to a back yard.
Concern is that
- Cost is the same if not more. $123,000
- Rent, i'm unsure for a family but potentially $180pw for students *2 =$360pw
I'm pretty confused at the moment and don't know how i should proceed. There is good things and bad things about each option but i am quite turned off by the price of the two bedder.
Another issue is car parks.
With the forced 3 meter set back from the back fence, do you see any issue. With a car parking in that 3m gap and potentially turning it into a carport? also i have to consider a car park for the main house which if left in it's current position will be a bit odd if the granny flat is fenced off from the main house.
I could try to make a space on the front lawn of the house that is right on the roundabout like every other house on the roundabout except mine. I'm sure council will not be of much help to me here.
These are Ian Cubbit's building plans adn they have been excellent in helping me to get to this stage. I liked the look of 'Affordable granny flats designs and contacted them today but they don't do Newcastle. Other providers in Newcastle haven't been so helpful.
Your experience, insight, guidance will be much appreciated as i'm truly lost at the moment.
Thank you
I am soon to settle on an IP purchase in Birmingham Gardens (Newcastle). I felt I paid good price for property, currently negatively geared but want to make it cash flow positive through Student accommodation and Granny Flat.
If I move very quickly it is likely that I can build in time for the student year - March - Dec. Current Tenants lease also runs out at about this time, so it feels timing wise that I should make a move now. The income it generates will help my overall portfolio position. My only concern is the current tenants freak out and leave or demand a massive rent reduction.
I am getting bogged down with a number of choices I have to make between 2 - 3 bedder, positioning on the block, investment return and concerns of how it may impact the value of the property.
As you can see in the attachments it is a corner block. In effect if I put up a dividing fence the block could look subdivided. There is enough grass area remaining for the main building to have a mini backyard.
I spoke to the rental agency and they suggested a three bedroom in general is more attractive for a family and potentially greater income if leasing to students.
I have attached drawings of the two proposals.
1) 3 bed 60 Sqm, will leave about a 1.8m gap from the main building (which has an extension on it. this makes me nervous as i wonder how sunlight may be blocked to the back of the house and also for the feeling o the two rooms in the extension view suddenly become a fence or the side of a granny flat.
There is also floor plan issue with no easy access to a backyard for the granny flat.
- Cost is likely to be $122,000 (all inclusive, with demolition of current garage)
- Rent, conservatively $320 - $360pw for the house rented to a family. For students maybe $150 - $160 Per room =$450pw
2) 2 Bed 60 Sqm, provides a much bigger space between the house - 3.18 meters. Has a nice layout with two toilets (Overkill) but direct access to a back yard.
Concern is that
- Cost is the same if not more. $123,000
- Rent, i'm unsure for a family but potentially $180pw for students *2 =$360pw
I'm pretty confused at the moment and don't know how i should proceed. There is good things and bad things about each option but i am quite turned off by the price of the two bedder.
Another issue is car parks.
With the forced 3 meter set back from the back fence, do you see any issue. With a car parking in that 3m gap and potentially turning it into a carport? also i have to consider a car park for the main house which if left in it's current position will be a bit odd if the granny flat is fenced off from the main house.
I could try to make a space on the front lawn of the house that is right on the roundabout like every other house on the roundabout except mine. I'm sure council will not be of much help to me here.
These are Ian Cubbit's building plans adn they have been excellent in helping me to get to this stage. I liked the look of 'Affordable granny flats designs and contacted them today but they don't do Newcastle. Other providers in Newcastle haven't been so helpful.
Your experience, insight, guidance will be much appreciated as i'm truly lost at the moment.
Thank you