Granny flats, also knows as secondary suites, are a common addition to backyards across the United States. More often than not, these structures sit unused with their potential unrealized. A granny suite can be attached to the main house, but it can also exist as a separate structure in close proximity.
These unique little structures are called “granny flats” because they’re often used to support a family member in a time of need. For example, if a young adult needs a place to stay after college, their parents may invite them and their family to come live in the granny suite for a while. Conversely, a parent may end up living in the granny flat behind their child’s house if they’ve gone through a rough divorce.
While granny flats can be a lifesaver for a family member in need, they can also provide a great opportunity to earn some extra income. Instead of letting the granny flat sit uninhabited in the backyard after their family member moves out, more people are deciding to rent out these small living spaces. This can be extremely lucrative, especially in larger cities with limited housing such as Los Angeles or San Francisco.
In fact, the financial incentive is so great that some people are choosing to add granny flats to their property for the sole purpose of renting them out. That’s right, they’re willingly choosing to let strangers live on their property for a reasonable sum of rent money.
The average monthly rent for a one bedroom apartment in Los Angeles is $2,313. Needless to say, this is out of reach for a lot of people. In cities like Los Angeles and San Francisco, many people can’t even afford housing anymore. People are living in extremely crowded conditions with friends because they can’t afford their own apartment. If property owners latch onto the idea of building granny flats on their property, the rent crisis may soon be over in these larger cities.
Because of the opportunity to make over $2,000 a month in some larger cities on rent, many property owners are thinking about building granny flats as an investment opportunity. This can be a great way to rake in a lot of money in a short amount of time. In areas with very high rent, the new addition will pay for itself in less than two years. This opportunity for extra income is too good to refuse.
By adding a granny flat to their property, families are finding that they suddenly have more extra money than they ever dreamed possible. It’s impossible for most people to invest in a second house to use as rental property because of taxes and the sheer expense of taking on a second mortgage. It takes years for most families to pay off a second rental property, if they could afford the down payment at all. However, with the low cost of building a granny suite, homeowners are reaping the benefits of a rental property without the stress of a second mortgage.
Granny flats can be an excellent investment opportunity. The city’s growth potential, employment rate and number of renters should always be considered before building a granny flat. If all these factors are on a homeowner’s side, building a granny flat could be an extremely wise decision.