At P J Cook Building, we take pride in providing upfront pricing for your new home or investment, so there are no hidden fees or surprises after signing our building contracts.
Unfortunately, it is not always like that across the industry. We have developed this essential guide to granny flat pricing so you can make an informed decision about the builder that offers the best value for money and the quality you want and deserve.
One thing is for sure – making the right decision is priceless.
Here are some key points to consider while doing your research on Granny Flats:
DIFFERENT TYPES OF GRANNY FLATS
There is a big difference between a modular or transportable kit home and a custom-built granny flat. Kit home prices often do not include essential inclusions such as site costs, council fees, electrical, gas, water, plumbing, carpets, blinds and other important finishing touches.
However, the main difference is the quality of the finished build. A custom-built granny flat is built on-site to suit your block of land and surroundings, and it will also have more design and personalisation options. All P J Cook granny flats are like mini versions of new homes and custom-built on-site.
BE WARY OF VERY LOW PRICES
Even if you are only comparing the pricing of custom-built granny flat builders, be wary of low prices. While the lure of a lower initial price tag sounds appealing, some builders will lock you in before hitting you with unexpected costs throughout your building journey. As the saying goes, if an offer seems too good to be true, it probably is.
Be wary of builders who vaguely draft proposals. It may appear as though all the necessary inclusions are covered; however, if you read the proposal and terms carefully, several essential items that should be included will be missing. Some builders subsequently offer these inclusions as ‘free’ promotional offers with a short deadline to entice you to sign up with them quickly – don’t fall for it as these costs will undoubtedly emerge further down the line, likely within your final building contract proposal.
Unfortunately, you have committed and invested too much money and time to the initial design by this stage. You will likely feel that it is not worth starting the entire process again with another builder. Generally, builders own the copyright of the design and do not offer licence fees or allow clients to use the design with another building firm, so you would have to start the entire process again.
Take care and compare quotes carefully, as this practice is common within the industry.
P J COOK GRANNY FLAT PRICE RANGES
We have seen prices offered around $70,000.00 for a 60m2 / 2-bedroom granny flat, which is not realistic if all costs are considered. In our experience, most volume builders buy materials around the same rate – if you have prices varying any more than 1%, it is more than likely that the cheaper quotes are missing heaps of hidden costs and fees that emerge down the line – don’t fall for it!
It’s important to note that all of our designs include our quality list of standard inclusions [that other builders offer as upgrades or within promotional offers], site costs, design, approvals and construction: complete turnkey, ready to move in.
COMPARING APPLES WITH APPLES
We understand the difficulties in comparing quotes without experience or industry knowledge. On the surface, inclusions might look similar, but they could be vaguely drafted and a world apart. That is why we have compiled a list of the most common items that we find our competitors leave out to appear cheaper and may later offer these missing inclusions to you as promotional upgrades to entice you to sign up quickly – the reality is you are not getting these for free, don’t fall for it!
Should you not take the time to complete a ‘Like for Like’ comparison, you risk all these costs being built into your final building contract proposal, which you may not have originally budgeted on. By this stage, you are locked into a contract, so you have no choice but to pay over-inflated prices for ‘extras’ that should have been included in the original estimate.
We are so confident that you will get more value with our standard inclusions that we encourage you to compare our price and inclusions with our competitors. It is vital to complete ‘Like for Like’ comparisons to ensure all inclusions are included and are of the same/similar quality so you can budget for the ‘Total Project Cost’.
IS IT CHEAPER TO BUILD SLAB ON GROUND OR PIERS?
Most granny flats are built slab on ground for cost purposes. However, if your block is in a flood-affected area or you have sloping land, it may be necessary and more cost-effective to build on piers. The decision depends on site conditions, slope and access.
WILL I GET A GOOD RETURN ON MY INVESTMENT?
A high-quality granny flat can add value to your property and provide a regular income stream.
INCREASE THE VALUE OF YOUR PROPERTY!
Granny flats can increase the value of your property when it is time to sell. Families will see the benefit of extra room for a teenager or older family member, and investors will recognise the opportunity for extra income.
If you are considering a granny flat, our recommendation is to build it well because a bad job could have the opposite effect on your property value. A good builder will consider the existing style of your property and design a granny flat that complements its surroundings. Investing in a good quality P J Cook Granny Flat that is built to last will help improve the capital value of your home or investment property over the long term.
EXAMPLE CASE STUDY OF THE FINANCIAL BENEFITS OF BUILDING A GRANNY FLAT
John lives in a four-bedroom home on a 680 square metre block in Ettalong Beach on the Central Coast. John has a large backyard with space that he does not use but must maintain.
John decides to add on a P J Cook 60 square metre 2-bedroom granny flat. He spends a total of $185,000.00, which includes construction, approvals, design, P J Cook’s standard inclusions, full turn-key, ready to move in. As this property is in Ettalong Beach, close to a lovely beach and plenty of shops, John can rent the two-bedroom flat out for $500 per week.
Under this scenario, the granny flat generates an annual return of around 12%. John can pay off the cost of his investment in approximately 8 years, after which he will enjoy an income stream of almost $23,000 per annum.
Of course, this is just one example; you need to consider your circumstances. For example, you might need to borrow money to fund the granny flat investment in your property. You might need to budget for landscaping, fencing, section 94 council contributions, etc. Other expenses will mean it takes longer for your investment to generate positive cash flow.
Talk to the P J Cook team to find out more about potential returns on your granny flat.
HOW EASY IS IT TO GET FINANCE FOR A GRANNY FLAT?
If you have equity in your primary home, you may be able to finance 100% of the granny flat value through your existing mortgage. Alternatively, a construction loan can be arranged by refinancing or taking out a separate loan. If the granny flat is being built as an investment property, the lender may consider the future rental income when assessing your loan application.
You might find some value in checking out our blog article Financing A Granny Flat.
HOW MUCH IS YOUR TIME WORTH?
Our standard inclusions include design services, management of the approval process and working closely with the council, private certifiers and other consultants until your project is approved. P J Cook saves you time and eases the stress associated with getting your building approved. How much is that worth to you?
THE RIGHT DECISION IS PRICELESS
It isn’t easy to put a dollar value on dealing with a reputable local family building company that has served its customers with integrity and distinction for many years. One thing is for sure – you will soon realise the value if you make a poor choice. Come and inspect one of our completed projects and speak to recent clients who have built with us; you will feel confident to partner with us in this journey.
Are you ready to explore the opportunity for a high-quality granny flat addition to your property?
For personalised advice, simply call us on [02] 4342 0853.