Hunter Valley Investor Paradise


Published: 28/03/2013

by Judith Taylor


Granny flat strategy to create positive cash flow.



Once the ideal property was located and secured, my clients took advantage of the settlement period for preparation including drawing of plans, certification of the development and selection of fittings and fixtures.  By the time the property settled on 14th November, Therese and Brett were ready for action.  The builder commenced work the very next day and the whole process ran like clockwork with the build being complete in 12 weeks.



The expectation for granny flat rent in this suburb is $300 to $320 per week.  With the granny flat looking more like a miniature house with its own fenced yard that even includes a mango tree, the tenants are delighted to be paying $365 per week for such a well located, well-built and thoughtfully designed cottage. Total cost for the granny flat, including planning, building, separate metering and certification was $120,000 (additional $6000 for air conditioning, upgrades, extras and additional pipe work).


12 weeks to complete and $365 per week Rent




Strategies for Increasing Value and Raising the Rent in Newcastle and the Hunter

The criteria for selecting a suitable investment property is usually a  combination of yield, future growth and the potential for adding value to the property, often referred to as manufactured growth. Yield is of course an important consideration and will also increase over time as the property naturally grows in value.  However, adding your own value is a means to increasing the yield and increasing the value of the property, much more quickly than waiting for the property to grow naturally in the market.
Combining the factors of scarcity of land, low vacancy rates, low unemployment and council support for increasing the density of properties, makes Newcastle and surrounds an ideal location to apply strategies for increasing rental yield.  Ways to add value may be as simple as some cosmetic work such as painting, polishing boards or a new kitchen.  It may be possible to create an extra bedroom by closing off a dining room or adding a wall.  A granny flat is a very fast and effective method to increase rent, taking into consideration that care needs to be taken to find an appropriate site, not just one that “squeezes” a building that looks like a shipping container onto the site.  The construction should take into consideration blending with the surrounding environment and building style.
There is opportunity for a more development based approach such as a second dwelling or villas to be developed at the rear of a property, bare land with townhouse or unit construction or New Generation Boarding Houses.  Entry prices are extremely attractive with well located properties around $300,000 to $350,000 for set and forget properties or those requiring some cosmetic renovation.  $350,000 to $400,000 for granny flat sites and $350,000 to $450,000 for development sites.
Distance for investors is not an issue as long as you have the right team of contacts to access such as property manager, tradies, town planner and builder.  In fact Vikki from Brunei has just purchased a granny flat site.  She  plans to set and forget the property initially and then commence granny flat construction towards the end of the year. 
If you would like information on investing in Newcastle or would like to discuss whether or not these strategies or the location would be suitable for you contact me though or phone me on 0407 204 475