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Building a Darwin granny flat: the advantages

Posted on 29 October, 2014 in Granny flats, Investment

New regulations in the Northern Territory, brought in by the Country Liberals in May 2014, now enable property owners to build an independent unit or “Granny Flat” on their single dwelling block with fewer restrictions. A granny flat is now able to be rented out as an individual dwelling to people other than family/dependents of the property owner. This is great news for investors as well as owner occupiers looking for some additional passive income. 

In Darwin, with the competitive rental market, a one bedroom granny flat with kitchen and bathroom can generate $350-450 per week which is a significant contribution to any mortgage. 

Why the change?

This change was made to primarily help out with the Northern Territory’s housing shortage. There is now an increasing interest in Darwin properties for sale with existing granny flats as well as an increase in the number of people wishing to build their own granny flat in order to make the most of this investment opportunity.

Building a Granny flat on your single dwelling block can increase your property’s sale value, or increase your properties rental value. By adding a granny flat, you can generate a significant amount of rental income onto an investment property. It means you can claim two income streams from a single block. The extra income can help turn a negatively geared property into a positively geared one to help with more disposable cash. A lot of renters even prefer the granny flat option over apartments as they allow access to a back-yard, which means they are often pet friendly, utilities are often included in the rent, and there is often more privacy as there are no shared walls. In Darwin, with the competitive rental market, a one bedroom granny flat with kitchen and bathroom can generate $350-450 per week which is a significant contribution to any mortgage. 

Aside from these investment options, the Granny Flat can be used as a home office to save on office space rental, or it can simply be used to accommodate the expanding family or visiting extended family.

Requirements for building a granny flat

  • Floor area must be within 50 sqm in urban areas and up to 80sqm in rural areas.
  • You can only build one independent dwelling per single dwelling block
  • There must be private open space of 45 sqm for the independent unit and 50sqm for the single dwelling.
  • The standard building set backs and height requirements are the same as for single dwellings.
  • One additional off-street car park space per bedroom for the independent unit. 

Forrest Building Co has a number of designs and floor plans which can help get you started on building your own Granny Flat to enable you to capitalise on this opportunity.