1. Build a granny flat in western Sydney
Investors should consider purchasing a circa 1960s to 1970s dwelling on 650- to 700-square-metre allotments and erect granny flats on the rear of the allotment, thus creating two separate tenancies. According to the Herron Todd White Property Market report, this type of investment has grown from a trickle to a flood and is mainly taking place in the Penrith Council area, although it has started to creep into neighbouring Blacktown Council area as well. Typically the investor is paying somewhere between $280,000 to $330,000 for the existing dwelling and between $60,000 to $80,000 for the granny flat plus spending an extra $25,000 on sprucing up the original dwelling. According to HTW the dual tenancies can generate weekly rent of $600 ($350 for the main house and $250 for the granny flat) with vacancy rates at practically 0 percent. HTW considers granny flats the “best investment from a rental return basis in the western suburbs”.

(Article by Property Observer, images are only a guide.)