From backyard to big returns: turning unused space into a high-yield investment
When Maria* sought to maximise the return on her investment property in Rutherford,
she turned to Leah Jay’s Investment Services team for expert guidance. She completed
a Property Health Check with Leah Jay to explore opportunities to enhance her
property’s value.
Contents
The Challenge
Maria’s property consisted of a house at the front, but the backyard remained
underutilised. After conducting a Property Health Check on the main house, Leah Jay’s
Investment Services team recommended leveraging the backyard space to build a
granny flat that would further increase rental income and long-term value.
Being located out of state, Maria needed a trustworthy team to help her navigate potential upgrades and additions, particularly given the complexities of council approvals and managing construction remotely.
The Solution
“Last year, when I had tenants move out of the main house, I thought it was an
opportunity to review what I could do with the property to increase the investment
returns. So I engaged Leah Jay to do a Property Health Check for me,” noted Maria.
After conducting a thorough Property Health Check, Matthew and the Investment
Services team proposed a strategic plan: undertake minor renovations to the house to
increase its rental appeal and construct a two-bedroom granny flat in the backyard. This solution would leverage the unused space and significantly boost both rental yield and property value.
The process began with basic updates to the existing house, including painting, new
flooring, and tiling, which improved its appearance. The significant addition, however, was the construction of a high-quality two-bedroom granny flat to be leased out separately.
Maria partnered with Backyard Grannys, a company recommended by Leah Jay, to
carry out the build.
The team ensured the process was seamless, assisting Maria with council approvals and coordinating with contractors. Despite minor challenges along the way, such as unexpected costs for fencing and soil removal, Maria found the experience smooth and well-managed, thanks to clear communication and regular
updates from both Leah Jay and the construction team.
“I found the experience to be a good one. Going through the council approval process,
there were some unexpected things I had to learn along the way, but the company was
very helpful in facilitating everything. Overall, for building something new, the process was relatively smooth,” shared Maria.
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The Result
The project, which took approximately 12 months from planning to completion, has
delivered outstanding results. The new granny flat has now been rented out for $465
per week, significantly boosting the property’s overall rental income. Combined with the increased rent from the main house, the entire property now generates an impressive return on investment of approximately 12%.
The construction cost of the granny flat, including contingencies, came in just over $200,000. This investment enhanced the rental yield and substantially increased the property’s market value. For Maria, the project has proven to be a sound financial decision, positioning the property as a competitive and high-performing
investment.
Maria’s success underscores the value of a detailed Property Health Check and the
importance of partnering with trusted professionals.
“Unlocking the full potential of every property is the goal of the Investment Services
team! Maria’s journey demonstrates how strategic planning and expert guidance can transform underutilised spaces into lucrative investments. By working closely with our clients and trusted partners, we strive to ensure a seamless experience that not only enhances property value but also empowers investors to achieve their financial goals.”
– Matthew Snedden, Investment Services Manager
Key Takeaways
- Maximising Space: Utilising underutilised backyard space can significantly enhance property value and rental income.
- Expert Guidance: Partnering with professionals who understand local regulations and market dynamics can streamline the process and mitigate risks.
- Strategic Renovations: Minor renovations can improve the appeal and rental income of existing properties, complementing larger additions like granny flats.
- Market Analysis: Conducting thorough market research is essential in setting competitive rental rates and maximising returns.
Need property advice?
For guidance or a Property Health Check from our Investment Services team, please
contact our Investment Services team today.
