16
THE MESSAGE. BRINGING INTO FOCUS FILIPINO PRESENCE IN AUSTRALIA
www.kalatas.com.au | Volume 4 Number 8 | May 2014
PROPERTY MARKET
Granny Flats can help build wealth
and create useable living space
PROPERTY | FINANCE
JERONE
BALAGTAS
[email protected]
M
any homeowners are
now opting to construct granny flats that resemble miniature houses on their properties.
Around Australia there has been an increase in homeowners
building granny flats and the benefits are many.
WHAT IS A GRANNY
FLAT?
A granny flat is a secondary
dwelling on a property. They
can be built attached to the main
house or garage, or can be a separate structure. In some cases it
can be cheaper to build a new
structure as it does not interfere
with the make-up of the house.
Granny flats are smaller than
the primary home on the block,
as they can only be 60 square
metres in size. Designs are varied, some even consisting of
three bedrooms plus kitchen,
dining and living spaces, while
others are simply one large space
that acts as a home office or hobby space.
The average cost to build a
granny flat is $80,000. However
they can range from $50,000 to
$140,000 depending on the type
of granny flat and depending on
inclusions.
WH E R E CAN G R AN NY
FLATS BE BUILT?
Granny flats can be built on
most residential-zoned properties, but it is best to check with
your local council in case there
are some restrictions that may
prevent you from constructing
one on your particular block.
The best way to do this is to purchase a planning certificate from
the local council.
In general if your block is
over 450 square metres in size
and the granny flat does not
take up more than 60 per cent
of the property, your property should be eligible for a granny flat. If you opt to use one of
the many specialist construction companies popping up all
over the place, they can help you
with figuring out if your property is suitable.
WHY ARE THEY SO
POPULAR?
Granny Flats have grown
dramatically in popularity over
the past couple of years. With
high house prices and rent keeping the children home for longer,
parents are looking at different
ways to help them achieve some
level of independence while saving for a home loan.
They also appeal a great deal
to those who own investment
properties, as granny flats are
relatively cheap to construct and
can increase the rental yield to
nearly 10 per cent. This extra income from rent can also help out
those needing to pay off their
mortgage, as the weekly rent obtained from these dwellings can
cover the repayments.
Granny flats are also known
to increase the overall value of
your property.
in a home, but they need to be
looked afte r without losing their
independence. A granny flat is
a great residence for elderly
parents. For us Filipino’s these
would seem a logical alternative as we don’t like the idea of
going to a nursing home…
THE ADVANTAGES:
RENTAL INCOME
Add another bedroom or
two for less cost than renovating the house. This then creates
a separate space for your adult
or teenage kids. You could then
rent the space out once they
grow up and move out.
Rent out the granny flat to
make some extra money, or
even downsize and move into
the granny flat yourself and
rent out the house to make even
more. As an investment, a granny flat is neutrally or positively
geared even before any tax benefits. Here is an excerpt below
from the website of local granny flat builder from Castle Hill
NSW ‘In House Granny Flats’
demonstrating the cash flow
and return on investment.
Granny flats are capable of
returning strong Yield. You can
use that extra income to:
l Accelerate repayment of
your mortgage
l Reinvest the extra cash
flow
lUse as day to day expenditure
HOUSING ELDERLY
PARENTS
You don’t want to put them
ADDING MORE
BEDROOMS
LODGING FOR YOUNG
MARRIED COUPLES
Young couples trying to
save for their own home need
somewhere cheap to rent in the
meantime. Parents sometimes
build them a granny flat out the
back to provide a solution to
their problem.
HOME OFFICES
Save money on renting an
expensive commercial space by
building your own office right
at home. You will also save on
travel costs to and from work
and eating out, spend less time
travelling places and get a better
life/work balance.
FINANCING GRANNY
FLATS
When it comes to financ-
Auction laws: Information for real estate agents,
stock and station agents and auctioneers (Part 1)
T
h e P r o p e r t y,
Stock and Business Agents Act
2002 and t he
Property, Stock
and Business Agents Regulation 2003 regulate the way that
auctions of residential property and rural land are conducted
in New South Wales.
B IDDER’S GUIDE
ing your new granny flat, you
should speak with a broker/
banker. Generally, you can use
the current equity available on
the property, which will merely
add an amount onto your current mortgage.
Obviously you will need to
have the existing property valued first to determine your equity. I can order upfront bank
valuations free of charge, contact myself to discuss further if
interested.
Jerone Balagtas is a local successful Filipino mortgage
broker part of the One Solutions group, he has 12years
experience in the accounting/finance/banking industry. He
walks the talk as he is a successful avid property investor.
Jerone encourages anyone to contact him regarding questions
pertaining to finance on 0439 594 899.
REAL ESTATE MADE EASY
DOM
MELLA
[email protected]
NSW Fair Trading’s fact
sheet the Bidder’s guide provides information for bidders
including how to register, the
kinds of proof of identity required, privacy rights and auction conditions.
The selling agent must try to
ensure that all bidders receive a
copy prior to the auction. Distribution to prospective buyers
could take place at inspections.
THE BIDDERS RECORD
For each auction, a Bidders
Record must be made of the
persons registered to bid at the
auction. Each bidder must be
given a bidder’s number to display.
The Bidders Record can be
made by:
l the selling agent, or an-
other agent engaged to act in
respect of the sale or acting for
l or on behalf of the auctioneer.
Entries may only be made
in the Bidders Record by the
agents involved and their employees.
IMPORTANT: The selling
agent must try to ensure that all
potential bidders receive a copy
of the Bidder’s guide prior to auction.
DETAILS TO BE
INCLUDED IN THE
BIDDERS RECORD
The Bidders Record must be
in English and must include:
l the date and place of the
auction
lthe address of the property or properties being auctioned
lthe name of the owner of
the property at the time of the
auction
lother details are in the Bidder’s Guide fact sheet.
IMPORTANT: Details in the
Bidders Record cannot be shown
to anyone, including the seller.
PROOF OF IDENTITY
The proof of identity requirements have been made as
flexible as possible.
The basic requirement is
that the proof of identity must
show the bidder’s name and address and must be issued by a
government authority or a financial institution.
THE BIDDER NUMBER
There are no set requirements about the form of the
bidder numbers – this is left up
to agents to decide. The number could, for example, be printed or written on a paddle with
a handle, or on a piece of cardboard or plastic or laminated
paper.
The basic requirement is that
the number can be clearly seen
by the auctioneer. It is also important to make sure that each
bidder has a different number.
PRE-REGISTERING
BIDDERS BEFORE THE
AUCTION DAY
Agents can pre-register bidders in advance of the auction to
save time on the day.
This could be done when
prospective buyers are inspecting the property, or any time prior to the auction. Agents could
encourage prospective buyers
to drop in or telephone the selling agent’s office to register their
intention to bid by giving their
name and address.
Many of the details on the
Bidders Record can also be filled
out in advance, such as the property address and owner’s name.
When pre-registered bidders arrive at the auction,
agents will need to confirm it
is the same person by checking
their proof of identity. The prospective buyer can then be given their bidder number.
IMPORTANT: Each bidder
must be given a different number.
Dom Mella is the Principal/Licensee of Ray White Rooty Hill. He’s also a qualified
accountant with background in Finance & Investments. He’s been in real estate business
since 1999.