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10 pointers for adding a granny flat

26 Apr 2013

If you own a freehold home and have space to build or existing outbuildings that could be converted, you may consider the advantages of adding a garden cottage or flatlet to bring in extra income.

You could view it as a value-adding upgrade to your property. When you wish to sell, a cottage that brings in income or provides extra accommodation, could be a real deal clincher.

Alternatively, for those with a parent in need of family care and company, 'granny cottage' would be more apt, and even for a teenager or young adult child, the addition of a cottage could be a wise decision whether it's for the present or part of your future planning.

On top of this, you could view it as a value-adding upgrade to your property. When you wish to sell, a cottage that brings in income or provides extra accommodation, could be a real deal clincher. Whether it will add value to the price you will get for your property when you eventually sell it, is difficult to predict - but the income you make from letting it out or the added space for accommodating family members should make your investment worthwhile in the long term.

If you plan on letting it out, be sure to keep an accurate record of all your expenses so you can submit these with your tax return.  Speak to a tax advisor and you'll often be surprised at what you can claim - building costs, fittings and furniture - are all big expenses but can be included in your claims. So can interest on your home loan. Although it may seem like a big outlay to start with, keep in mind you'll be getting a steady income for years to come.

However, it will probably cost more than you think - building and conversions are not cheap nowadays, so start by deciding on the concept and possible options, and then go about doing a full costing on the project.

Here are ten points to consider before adding a granny cottage:

1. You may need planning permission

If it's a new building or conversion you'll need planning permission and an architect or draughtsperson who is qualified to draw up and submit plans to your local municipal planning department. Be sure to understand their fee structure and using a draughtsperson can save you a packet, especially if you're not doing a major alteration. Also, lay down a budget and be honest about what you can really afford - otherwise you may end up with your dream plans, but translating these into reality would be another thing altogether.

2. Budget for more rather than less

Don't listen to people who tell you it will cost 'not much at all' as they don't usually have first-hand experience. I was told by a family member that it should cost no more than R20 000 to alter a few outside rooms which were probably once the original garages, and he was horrified at the builder's quote of R26 000. Having renovated two properties before, I thought the builder was 'too reasonable' and fully expected this to be just the beginning. What seemed like a minor alteration  ended up costing R130 000 once plumbing, electrics, fittings, fixtures, painting, paving, etc. had been added in. Make sure you get a few quotes and be careful that you have covered the job properly otherwise you'll find yourself the recipient of many more top-up bills. 

3. Be choosy about the builder

Everything should be clearly stated and in writing. The builder should ideally be registered with Home Builders Registration Council (NHBRC) and it would be wise to get references of past work - call these and ask questions like 'Did he finish on time? Were they accurate with costs? What was the quality of workmanship like? etc.' Scrutinise the contract properly and consider adding timelines with a penalty clause for not completing work on time. A lazy or disorganised builder can end up costing a lot more than the job he quoted for. It would also be wise to keep a written record of the daily progress on the job.

Another thing to discuss is whether you will be responsible for buying the materials or leave it to the contractor. You may be able to save something if you shop around for the best deals, but you'll need to decide whether the hassle factor is worth it or not. If you have a reliable plumber and electrician, get them to give you a quote rather than just accepting the builder's recommendation. In any event, check that the plumber and electrician are certified to do the job and able to issue you with plumbing and electrical certificates where required once the job is done.

4. Don't forget to include cost fittings and extras

It's easy to look at the builder's quote and think that's it. But before you sign remember to make a list of all the fittings and fixtures you will need. These include bathroom and kitchen fittings, tiles, carpets or other flooring as well as paint. Consider things like plumbing for a washing machine otherwise your tenant will have to use a Laundromat or you may feel obliged to share yours. Garden cottages are often partly or completely equipped, so you'll need to decide what, if any, appliances to include and plan the space well.

A fitted kitchen can be very expensive, so be creative and shop around. Pine kitchen units can be custom ordered with the option of staining and can offer a much cheaper fitted kitchen solution. You can then buy the countertop and self-install or ask the builder for a quote to do this.

5. Wise bathroom choices

If you have little space rather have a shower, as a bath uses more water and not everyone likes one. You could have a shower in a bath but decide on whether this is necessary, consider the cost of water, space available and what type of tenant you wish to attract. Remember, they will not be staying forever and as long as it is comfortable, you really don't need to 'go to town' on things.

The bathroom will likely be small so be clever with cupboard space. Most home improvement stores have affordable, compact basin with washstand cupboard options - try and get one with space around the basin to place items like soap or a water mug so things don't keep toppling off. A mirror cupboard can also add that much needed extra space. Find some ornamental hooks to add a place to easily hang towels and clothes. Look around for specials and don't be tempted to overspend, rather hunt for good quality bargains like end of range tiles, which can add a classy touch without breaking the bank. Similarly you could save by using only one glass shower panel and again take the time to shop around for a 'good deal'.

6. Stick to neutral colours

Go for neutral colours that would work for anyone. This means choosing a paint colour like 'Barely White' or something similar, which also reflects light and creates a sense of space in small rooms. Choose tiles and carpets in neutral shades and think 'lighten and brighten' for compact spaces. Keep it clean and contemporary so people will be able to add their personal items and feel it's their own space.

7. Pre-paid meters and going green

Electricity is a significant cost and you need to think carefully about whether to include this cost in the rent or not. Pre-paid meters are worth researching or at least a meter that allows you to track the electricity usage separately from the rest of the property.

Choose the light fittings wisely and use energy saving bulbs and LED lights where possible as this will save on the electricity bill. Also, explore the options of a heat pump, solar geyser and geyser timer. Although this can seem expensive, the market is becoming more competitive and it's worth shopping around and considering the options available. In the long term it is bound to pay off.

8. Safety and security features

If you have an alarm in the house you may consider getting a quote from your security company to install a separate keypad for the cottage linked to your home alarm but with its own code. This will cost you a few thousand rands but good security is essential and will add to the appeal when you let the flat out.

Outdoor lighting is important as you don't want a tenant to fall up a dark stairway and then sue you. Rather light the pathways and entrance properly and spend a little more on light fittings that have LED lights. Secure parking is another must-have and you may consider adding a carport if you only have uncovered parking.

9. Will you let it furnished or unfurnished?

It is wise to decide this while still in the planning phase. The reason is that you will be targeting a completely different audience. Where you live might influence the type of tenant you will be able to attract, for example, if you live in one of Joburg's central or northern suburbs which have easy access to the Sandton CBD and office nodes you could aim at a single business professional who is looking for hassle-free furnished accommodation for a period of time, probably six months to a year. You might include the cottage being serviced a few times a week with washing and ironing done. Something else to think about is to have your DSTV connected to the cottage as well. Wiring, setup and a decoder could cost you a good few thousand rands, but a dual viewing setup would mean you could recover some of the cost of your own monthly subscription while offering a desirable extra.

Do a full costing on furnishing including bed linen, crockery, cutlery and other items like lamps etc. You can usually get a higher rental for furnished accommodation and there tends to be less wear and tear (provided you have a well-behaved tenant) than when someone moves in with all their own furniture and starts remodelling it to their taste. However, not furnishing can save you a lot in upfront costs and you may also prefer not to have any responsibilities other than providing accommodation. Partly furnished and equipped garden cottages are also popular, but ultimately only you can decide what suits you best.

10. What rental will you charge?

This will require a bit of homework on your part. Start by having a look through the rentals listed on property websites as well as sites like Gumtree to determine what rentals are being charged for similar cottages in your area. Be sure to distinguish between furnished and unfurnished, serviced or not. Added extras like DSTV and washing and ironing will allow you to add this to your price and connect you with a different kind of tenant. Also, do you want to a long-term arrangement or are you happy with a six month lease? One advantage of shorter leases is that it is easier to increase the rent, while in a longer term arrangement this could prove more difficult.

Having a couple rather than a single tenant will likely add to the bill, so be sure to factor this extra expense into your rent. Other conditions like no smoking and no pets should be stipulated. Also, consider where you live and what companies are located nearby. You could even consider a corporate letting arrangement if you're close to one of the main business nodes.

If you do your homework and plan well you could create an excellent source of additional income while at the same time adding value and accommodation space to your home. - Julia Hinton 

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Julia Hinton

Julia Hinton

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