Positive granny flat-brochure-11/2011

20% + Returns Granny Flats

Starting at $68,000 fully installed

Who We Are & What We Do

As project manager Positive Renovations does the following:

1. Provide a free initial assessment of your property. 2. Co-ordinate a comprehensive on-site inspection of your property to provide you with a build zone map and a guaranteed fixed price.

3. Co-ordinate the approval of your granny flat.

4. Co-ordinate preparation of the building contract between the builder and the client.

5. Co-ordinate finance approval (if required).

6. Notify the builder to commence works once approval has been received.

7. Appoint the private certifier to inspect stages and provide an occupation certificate on completion.

8. Provide a weekly update with photos to ensure the builder is progressing with the timetable.

9. Answer any certification or construction queries for the client throughout the project.

10. Provision of final tax invoices to client.

Positive Renovations is a property renovation company specialising in the renovation of units and houses and the construction of granny flats. Positive utilises experienced licensed builders with local council knowledge to ensure projects are delivered on time and budget.

Rick Stapleton – Project ManagerRick has extensive experience in project managing small to medium development projects in Queensland and New South Wales. Rick has previously worked at UBS Warburg as an Associate Director in corporate finance and at Shakespeare Haney Securities Limited as Finance Director.

Phone: (02) 9037 4668 - Email: [email protected]

James Elliott – Project ManagerJames is a licensed builder and has over 12 years experience in the building and construction industry. He works in project management for granny flats and his role includes providing project advice, engaging builders and tradesmen and working throughout the approval and construction process. James is also available to provide quotes for renovations should the purchaser require them.

Introduction

• Positive Renovations (Positive) is an experienced team of property professionals who have developed a Granny Flat investment package with a massive 20%+ return on investment.

• We use the best most experienced approvals team in NSW to obtain fast and efficient approvals for construction (3-4 weeks).

• We only work with licensed builders who have many years experience in building small homes and are proven reliable.

• We have worked together with our builders to lower the price of construction to make Granny Flats more affordable for you.

• Our designs come in a one and two bed configurations to fit comfortably in your backyard.

What is a Granny Flat?• A Granny Flat is a self contained unit which is constructed in the backyard of your existing home.

• Our Granny Flats have a bathroom, laundry, kitchen and 1-2 bedrooms.

• The Granny Flat and the existing home can be rented to separate tenants.

• The Granny Flat tenant access their unit down one side of the home and the rear yard is divided using fencing to keep the tenants separate.

Kitch

en/D

ining

Living

Bath/L'dry

refspace

770

720

robe

wm spac

e

720

770

4204 20robe

Bed 1Bed 2

510

1400

600

600

1368

Benefits of a Granny Flat• NSW Affordable Housing legislation allows the Granny Flat can be rented out to a third party tenant. It also provides for quick approval time of 10 days if they qualify as complying development.

• The Granny Flat provides surplus income to the property owner through a duel income.

• Your property will increase in value and be more saleable.

• You will receive additional depreciation benefits.


Granny Flat Returns

• Based on rent of $300 per week the two bed Granny Flat shows a gross annual return of 21.4% on the outlay cost of $73,000 returning surplus cash of $172 per week in additional income.

• This is based on a rental management fee of 7.5%, and and a 100% interest only loan at 7.5% per annum.


One Bed Garden Flat - $68,000 Two Bed Garden Flat - $73,000

Weekly rent % gross return pa

Surplus cash per week* Weekly rent % gross

return pa Surplus cash

per week*

$210 16.1% $96 $270 19.2% $144

$220 16.8% $105 $280 19.9% $154

$230 17.6% $115 $290 20.7% $163

$240 18.4% $124 $300 21.4% $172

Minimum Lot Requirements

Positive does a free initial assessment of your property to determine that it meets the minimum requirements under the State legislation (AHSEPP) and whether it can be approved as a complying development therefore not requiring council development approval.

Positive will check the following:

• Minimum lot size 450m2• Minimum frontage of 12m• Minimum rear setback of 3.0m and side setback of 0.9m

• Main sewer does not pass through the proposed build zone (sewerage diagram required)

• There are no restrictions on your property for a complying development (s149 required)

• Minimum setback from main dwelling of 1.8m

• Available side access for granny flat tenant

• No major trees within 3.0m of proposed granny flat position

Assuming your lot meets the minimum requirements above a detailed on site assessment can then be done by our approval team for $990 which provides a build zone map and a guaranteed granny flat price.


Financing Options

Obtaining finance for two dwellings on one property is viewed by lenders in the same light as a typical home loan however with the advantage of increased serviceability.

There are two common methods for funding the construction of your granny flat: a) Loan increase or equity loan b) Construction loan

a) The easiest and quickest way to obtain funding is to use the existing equity in the your property (or properties) to increase your existing loan. The lender may require you to obtain a new valuation on your property (or properties) to verify the current valuation/s. This provides you with an opportunity to review your current loan and to refinance at a lower interest rate while obtaining a loan increase. 100% finance is usually available using this option and is therefore the preferred method.

b) Most lenders will also provide a construction loan. Your lender will usually provide the lessor of i) the ‘on completion’ value of the existing house and proposed granny flat or ii) the current value of the existing property and the cost of the granny flat. This method can result in 80% finance for the construction of your granny flat, however, this needs to be arranged through a local banker, not your broker. Typical broker loan products do not offer 80% loans, and it is likely that you will be required to contribute more equity. We can obtain 80% loans for you and will arrange this on your behalf.

• Positive Renovations will provide you with a building contract, a full set of plans and rental appraisal from a local agent to facilitate you obtaining finance

• Positive Renovations can also organise a loan for your new granny flat through our experienced team of brokers and financial experts


The Complete Package

We undertake a free initial assessment of your property to see if it meets the minimum requirements.

We co-ordinate the approval of your granny flat.

We arrange the finance for your granny flat.

Our licensed builder will construct your granny flat.

We provide you with a final occupation certificate and tax invoice on completion.

1

2

3


4

5

One Bed Design

$68,00028m2


Two Bed Design

$73,00037m2We can also construct larger designs up to 60m2 on request, however, we often find the returns diminish over 40m2.


Standard Inclusions

ExTERnAl • Elevated design with bearers and joists.

• Up to 11.0m of electrical connection and separate electrical meter.

• Up to 25.0m of external water/stormwater connection.

• Up to 11.0m of external sewer connection.

• External clothesline.

• Hardiplank external cladding and colorbond roof and guttering.

• Up to 10m of fencing.

InTERnAl • Timber laminate to living/kitchen areas, carpet to bedrooms and tiling to bathroom/laundry.

• Under bench electric oven, gas cook top and electric rangehood.

• Gas hotwater system.

• 1Hp split air conditioner.

• Built in robes with shelving and hanging rails.

• 600mm vanity with 2 glass doors, 2 lamp heat fan, 45l laundry tub, laminated sliding glass shower screen.

• 7 double and 2 single power points, tv aerial, phone line, 6 lights with oyster fitting, smoke detector.


Optional Extras & Exclusions

OPTIOnAl ExTRAS • Timber decking.

• Landscaping / paving.

ExcluSIOnS • Council s94 contributions (if applicable).

• Demolition.

• Removal of garage / shed / existing concrete slab.

• Tree removal.


Buying Process

Positive Renovations will do an obligation free initial assessment of your property to check if it meets the minimum requirements under NSW State legislation. If it does then Positive will arrange a detailed on site inspection of your property for $990. This will provide you with a build zone map and a guaranteed fixed price for your chosen granny flat. The $990 is included in the purchase price if you proceed with the purchase of one of our granny flat packages.

You will be required to pay the balance of the approval fee of $6,500 (total $7,490). Our approvals team will then prepare your approval for lodgement in 2 weeks. If it meets certain requirements it can then be lodged with our private certifier for approval in 10 days. Otherwise it will need to be lodged with the relevant council and may take 4 weeks. During the approval process we will provide you with a building contract so that you can obtain finance. Once the approval is confirmed you will need to sign the building contract and construction management agreement.

7-10 days prior to construction commencing you will need to deposit the building contract amount into our account (unless you have a construction loan). During construction we will make various payments to the builder at foundation stage, framing stage, lockup stage, fix-out stage and at completion. You are welcome to make a final inspection before we make the final payment to ensure you are completely satisfied with the finished installation. All Positive Granny Flats come with a 7 year builders warranty for your peace of mind. Once the final payment is made you will be provided with a tax invoice and a final occupation certificate and your tenants are ready to move in.

Step 1 Check if your block

is suitable.

Step 2 Approval Process.

Step 3 Construction

and completion.


Granny Flat Buyers Guide1. comparing various granny flat quotes

• you need to compare apples with apples• does the price include approvals?• does the price include project management?• does the price include airconditioning, fencing, tv antenna, built-in wardrobes, fencing?• does the price include a laundry?• does the price include a separate electrical meter in the house power box? This is required under NSW law if an agent is managing your rental• Positive granny flat packages include everything

2. Purchasing a granny flat as a kit only• Sounds like a great way to save money HOWEVER• Does it comply with Australian standards? May kits are imported from China and have not been manufactured to Australian standards and you will not get an occupation certificate.• Does the kit include all fixout items such as toilet, vanity, laundry tub, tapware, kitchen, air conditioner, oven etc?• If it does then you still need to double this price (as rule of thumb) to get a builder to put it together on site including foundation and services connected!

3. converting an existing garage into a granny flat

• This will need to be done through a development application to council• Can be very expensive due to non complying setbacks, ceiling height, unknown slab strength etc and may not be approved• If you convert it without approval then real estate agents will not rent it out for you• You will lose valuable storage or parking space for the house tenant

4. Building your own granny flat kit as an owner builder

• Great way to save money especially if you have the skills

• You will still need to get licensed trades to complete wet areas, electrical and plumbing work• Keep in mind that you will need to do an owner builder course and still obtain HOW insurance• You are liable for HOW insurance for 7 years even if you sell your property

5. Buying a completed granny flat from ebay or the trading post

• Does it come with all engineering certificates and meet Australian standards?• It is likely you are buying an expensive shed• granny flats need to be built on site to be approved as a granny flat under NSW State legislation• prefabricated granny flats will not comply with BASIX requirements unless it is specifically built for your property• Real estate estate agents will not rent out a granny flat for you that is not approved

6. Buying a house with an existing granny flat

• Beware the granny flat is unlikely to be approved• Approved granny flat properties are rarely sold due to high cashflow• Real estate agents will not rent out the granny flat for you• You are liable to the tenant if the granny flat burns down

7. Obtaining approval for your granny flat by yourself

• This is not as easy as you think• When I first tried this for one of my first clients it took 3-4 months! I have heard it taking a lot longer than this if council gets involved.• There are lot of consultants which need to be instructed in the correct order depending on your property• Positive uses a specialist approval team that completes this process in 4-5 weeks at the same cost if you did it yourself

8. The bigger the granny flat the better• Under NSW State legislation you can build up to 60m2 so why not build the maximum size?• The additional rental gain from building a 60m2 granny flat as opposed to a 40m2 granny flat is minimal• You will generally not receive more rent for the granny flat than the house• The bigger the granny flat the smaller the backyard for the house• A lot of backyards are not big enough for a 60m2 granny flat• All these options need to be considered before automatically assuming 60m2 is the optimal size

9. Brick and tile granny flats are better• They certainly cost more and will NOT get you any more rental income for your granny flat

10. Three bedroom granny flats• As a general rule you will not receive any more rent for the granny flat than the house• A 2 bedroom granny flat in Western Sydney rents for $250-280 per week and houses for approximately $300 per week• The additional cost of a 3 bedroom 60m2 granny flat would only result in an extra $20-30 per week of rental income

11. Section 94 council contributions• These are expensive and need to be paid before you receive an approval for your granny flat• They vary from $2,500 to over $10,000 and can depend on the number of bedrooms and build price• Most councils provide exemptions to these contributions however they are not openly communicated• Positive’s approval team understands these council regulations and will prepare your application to avoid these if possible


Contact Us

Phone: (02) 9037 4668

Email: [email protected]

Level 2, Suite 3, 11 Albany Street, St Leonards, NSW, 2065

Business

Positive granny flat-brochure-11/2011