INVESTORS

Granny Flat – High Investment Returns

 

As well as using our granny flats / second dwellings / cabins for personal living or family, these granny flats are also ideal for INVESTORS who want an amazing return on their investment.

 

If you own your own home or any rental investment properties, why not purchase and install a Granny Flat and collect additional rent for a second income stream. If you live in your own home, you can install a Granny Flat in your backyard, and collect a stream of cash from the granny flat rental, or you may be in a situation where you want to live in the Granny Flat and rent out the main dwelling… The choices you have in collecting an incredible additional income is only limited to your imagination. Depending on the area where you are, rental returns in Sydney, NSW for our ‘Lindeman’ 2-bed unit, will reward you with an income of between $350 – $450 per week. How’s that for additional cash? And even if you borrow the full amount, it is still a POSITIVE Cashflow investment.

 

Scroll down the page to see how much money you can generate from additional NET income, simply by installating one of our granny flats on your ‘owner occupied’ or Sydney investment property. You will be AMAZED at the high net returns.

 

Using a Granny Flat as a Rental Investment

As an investor, your benchmark to compare one investment with another is normally referred to as ROI – Return On Investment. It is expressed as a percentage and is simply the percentage return in one year when compared to the original amount invested.

 

For example, let’s say you invested $10,000 out of your pocket to inject into an investment. Assuming that after a year this $10,000 investment generated $1,000 NET profit, then your ROI would be 10% PA. This simple formula is shown below.

By using the simple formula above we will look at how investing in a Granny Flat for rental income is an extremely safe and profitable option with very high ROI.

 

The TOTAL BENEFIT is the total amount of rental income in one year. The COST would be total amount of loan repayments paid in that same year.

 

Please refer to the table below comparing ROI on our Flagship ‘Lindeman’ 9.0 x 6.6m 2-Bedroom model with a large covered veranda.

 

LINDEMAN’ Granny Flat – 59.4 Square Metres

2-Bedroom with Large Covered Veranda

Investment Outlay* – Interest Only Loan

$110,000

$110,000

$110,000

Weekly Rental Return

$350

$400

$450

Annual Rent Return PA (Total Benefit)

$18,200

$20,800

$23,400

Bank Loan Repayment per Annum (cost)**

$10,450

$10,450

$10,450

ROI(Return On Investment – Loan Payment)

74.16%

99.04%

123.92%

* This investment outlay may differ in each individual situation depending on each individual property, where it is located and access to the property. The above figures are example figures for education purposes only.**It assumes approximate interest only loan at 9.5%PA to pay for full investment amount.

 

Some investors use a more conventional & simple way of calculating ROI, especially if you are using your own cash funds to pay for the investment.

 

The annual rent return is shown as a percentage of investment total. You simply divide the total investment cost by the annual rent return to give you your annual ROI. Unlike the previous example when you use NONE of your own money, in this instance you are paying out of your own pocket – its YOUR money. Many real estate investors use this method to calculate their annual ROI.

 

See the table below which uses this method of calculating the Return On Investment

 

LINDEMAN’ Granny Flat – 59.4 Square Metres

2-Bedroom with Large Covered Veranda

Investment Outlay* – Own Funds

$110,000

$110,000

$110,000

Weekly Rental Return

$350

$400

$450

Annual Rent Return PA (Total Benefit)

$18,200

$20,800

$23,400

ROI(Return On Investment – Out of Pocket Cash )

16.55%

18.91%

21.27%

* This investment outlay includes building, transport & Installation and may differ in each individual situation depending on where your property is located and access to the property. The above figures are example figures for education purposes only. It assumes you pay for full investment amount out of your own funds.

 

As you can see, erecting one of our Granny Flats or Second Dwelling and using it as an investment to earn rental income is a fantastic option for investors or for other folk who want to live in a smaller home on the same property and rent out their main residence for a high income stream. There are very few (if any) other low-risk and high return investments which have such a high ROI and still ensure that your investment is SAFE. A great new option for any investor or Homeowner.