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As the focus on further education for young people grows, combined with the inability to have an overseas gap year, there are more and more Australians enrolling in University courses. In fact, a University of Sydney spokeswoman recently described demand for places from local students has been “higher than ever”. With such demand, there seems to be an ideal opportunity if you live in a University catchment area and are considering adding a Granny Flat to your property. In this article, we investigate student renters as an additional source of income for your Granny Flat investment.
The Advantages of Renting out a Granny Flat to Student Renters
With a constant flow of students looking at renting out a Granny Flat, University hot spots present an ideal opportunity for investors and landlords. For example, Charles Sturt University has a campus in the suburb of Mitchell in Bathurst, where the median home price is $435,000 (June 2021) on larger blocks of land that can potentially be used to build a Granny Flat. Education and employment opportunities are attracting families to relocate to Bathurst - which has a number of retail stores, corporate and government offices and other commercial spaces, along with a gross rental yield of 4.18% (June 2021). According to Smart Property Investment, investors could earn a rental income of $350 per week based on current median prices.
However, it is key to keep in mind building a Granny Flat as a secondary dwelling next to a house means you have a separate entrance and therefore creates two separate rental opportunities, generating extra income to boost your return on investment. Granny Flats not only present a second stream of income to the house initially purchased, but they also add value to the existing property and lower the risk of vacant periods by spreading the tenancy over multiple leases. If you want to know more about investing in Granny Flats, it may be helpful to read our article Granny Flat Tax in 2021: Make Sure You Know These Tips and Traps.
Get Extra Income for Your Investment
Do you live in a University catchment area? Cubitt’s takes the hassle out of building a Granny Flat investment. We offer a wide range of value-packed inclusions for every Granny Flat we build - such as COLORBOND® Steel Roofing and gutters in a selection of colours to choose from, high-performance insulation to help you save on energy costs, as well as kitchen appliances such as an electric or gas cooktop, an electric under-bench oven, an electric recirculating rangehood along with many more inclusions! For more information on our inclusions, read our article What is Included When You Purchase a Granny Flat?
Cubitt’s also provides a dedicated point of contact for every customer to keep you informed throughout the building process and offer professional advice, while we also manage the council approval process for you via our experienced council planning and drafting team.
Fortunately, there is a long list of locations throughout NSW that have relatively affordable houses to invest in with more than 550m2 of land to accommodate a Granny Flat, while being in close proximity to Universities and regional campuses:
Southern NSW Student Renter Hot Spots
Student hot spots across southern NSW include Wollongong for the University of Wollongong (UOW) and TAFE, as well as UOW Bateman’s Bay campus where you can buy a house on considerable land for $550,000 (June 2021), UOW Southern Highlands campus where 800m2 of land in Moss Vale costs $425,000 (June 2021), UOW Bega campus where you can buy a house on 600m2 land for $475,000 (June 2021) and Charles Sturt University Goulburn campus, where a house on 700m2 of land has an asking price of $450,000 (June 2021).
The median house weekly rents in these areas are $430 per week in Bateman’s Bay, $550 per week in Moss Vale, $380 per week in Bega and $375 per week in Goulburn.
Western NSW Student Renter Hot Spots
Western Sydney University is a popular destination for students, with a campus in Penrith as well as Campbelltown, Liverpool, Hawkesbury and more. Charles Sturt University also has campuses throughout regional western NSW, including a campus in Dubbo where a house with adequate land starts from $210,000 (June 2021), and a campus in Orange where a house on 600m2 land costs $300,000 (June 2021) as well as a campus in Wagga Wagga where a house on a 900m2 block costs $380,000 (June 2021).
The median house weekly rents in these areas are $375 per week in Dubbo, $420 per week in Orange and $360 per week in Wagga Wagga. Don’t forget building a Granny Flat investment separate to the main dwelling creates two streams of rental income.
Northern NSW Student Renter Hot Spots
The University of Newcastle is a great student area, including the nearby suburb of Shortland where a house on 600m2 of land is fetching $460,000 (June 2021). Southern Cross University is based south west of Byron Bay in the suburb of East Lismore, where a house on 900m2 land can be bought for $400,000 (June 2021), while there is also a Southern Cross University campus in Coffs Harbour. Charles Sturt University has a campus in Port Macquarie, where a house on 600m2 block costs $480,000 (June 2021).
The median house weekly rents in these areas are $420 per week in Shortland, a suburb of Newcastle, $430 per week in East Lismore, and $490 per week in Port Macquarie. When doing your ROI calculations, remember a Granny Flat and a house are both rented separately, so when looking at the multiple income streams it becomes apparent why properties with Granny Flats are so desirable for investors.
If you live in a University catchment area, experience the vast financial benefits of building a Granny Flat on your property. Cubitt’s is proudly a family-owned and operated business with over 25 years’ experience building Granny Flats and home extensions throughout NSW and the ACT. Our longevity has allowed us to perfect the process of designing and building a wide range of 1-bedroom Granny Flats, 2-bedroom Granny Flats and even 3-bedroom Granny Flats.
To learn more about our value-packed inclusions or to speak with an experienced sales and design consultant, call our friendly team on 1300 721 150.
Cubitt's is staffed by a professional team of draftsmen and builders with years of experience. Ask us about the Cubitt's Advantage today.