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  • Writer's pictureSean Wilson

5 Mistakes to Avoid When Building a Granny Flat

Updated: Jul 25, 2018

Mistake #1

Owners do not insist on a builder who designs in 3D. This is actually one of the first mistakes an owner makes as a lack of communication causes disappointment, and if a picture tells a thousand words than what better way to communicate than to SEE the project?

ALWAYS insist on 3D visualisation.

Mistake #2

A lack of understanding of council regulations.

The BSA takes care of building regulations but who takes care of planning? Answer: Local Councils.

Missing the mark in this area can cause a lot of strife. What could be worse than a neighbours complaint about your new addition than finding out you don't have a legal leg to stand on?

EVERY council differs on planning policies. Some let your rent out the granny flat, while others allow family members only. Some have size restrictions, others do not. Many times one size does not fit all.

Mistake #3

No 'site-centric' design ideas. When we buy a car, or clothes, or anything we make our decisions based on how it suits US.

Generally speaking, 'off the shelf' designs are not based on how the site works. They aren't based on how the designs suits the site. Instead many people try to make the site suit the design.

This all adds to cost as site levelling, retaining walls and drainage systems all need to be put into place to accommodate the design. A much easier, simpler and more affordable solution can be found by starting out with the site needs.


"When I talk about positively geared rentals, I am describing a rental property where ALL incoming rent pays for ALL the costs AS WELL AS ​making me a profit.

Yes, that includes interest, mortgage repayments, rates, water, maintenance and management fees!

In fact, the strategy worked so well that I am doing at least one every year for myself."


Mistake #4

Not understanding building codes.

This is a major issue that we have with some investors. They choose to 'go it alone' and in doing so are led down the garden path.

For example, one investor recently was stung by their lack of knowledge in regards to ceiling heights. The BSA stipulates that ceiling heights for bedrooms, living rooms ect. have to be at least 2.4m. This investor thought that by getting the building certified as 'storage' it would still work.

You MUST find people who are knowledgable in the areas of design, construction AND council rules and regulations.

Mistake #5

Negative gearing mentality.

The biggest mistake to make in the positively geared market is to approach it with the 'negatively geared mindset'.

That is, we see $200-$300 positively geared and think that it is too good to be true. Simply because our accountants have been saying this for decades.

If you haven't noticed the era of capital growth booms is coming to an end and so investors have to be smart about finding sources of cashflow in spite of semi-stagnant markets. STOP approaching property investment with a 'capital growth or nothing' mentality.

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