Renting out that granny flat is way to go

Renting out that granny flat is way to go

Category Property News

TOUGH economic conditions globally are increasingly forcing people to look for innovative housing solutions, and among the most popular current trends are dual living that provides a rental income stream and multigenerational living that cuts down on costs. Both options benefit from and depend on numerous people peacefully coexisting on the same property, though, which can present challenges. And if you're considering converting a property for dual living, there are also practical and regulatory issues that need to be taken into account and addressed. Multigenerational living is a growing worldwide phenomenon that's becoming more prevalent as increasing costs make it difficult for families to make ends meet and for youngsters to leave the nest. And according to Lew Geffen Sotheby's International Realty executive director, Sandy Geffen, South Africa isn't immune to this trend. "Young adults are living with their parents for longer, affordable retirement accommodation is in short supply and home ownership is frequently delayed for years as young families and firsttime buyers now have to save for bigger deposits," says Geffen. According to the last South African Census, just over 50 percent of the country's households are multigenerational, reflecting a study reported in Time Magazine last November noting that more young adults (aged 18 to 34) in the US are living with their parents now than at any time since 1940. Geffen says local estate agents are reporting an everincreasing number of queries for properties that will accommodate extended families. And while economic necessity may be the primary driver behind families needing to share properties, Geffen says there are several advantages to this type of arrangement that mitigate the reduced amount of personal space. "There's always a silver lining to be found in any challenging situation and in this instance there are several, even if it's a case of three genera tions squeezed into one not overly large home. "Shared expenses ease the financial burden and allow for a better quality of life." Geffen says that multigenerational living can solve many daytoday hurdles faced by modern households. "Few families can afford a stayathome parent and many are finding it difficult to cover the costs of childcare, so in this way the need for care for both grandchildren and grandparents can be seamlessly accommodated. "Multigenerational living also offers increased security for homes as they're not unoc cupied for long stretches during the day, as well as for elderly family members in general, who would be more vulnerable to targeted crime if they were living alone." Geffen does say, however, that this style of living will create hurdles because of the differing needs and expectations of the inhabitants, especially if they span generations. Geffen offers the following guidelines to avoid pitfalls and maximise the benefits: Discuss and agree on each person's responsibilities from the start and if anyone requires care or assistance, establish what this entails and how it should be implemented. Discuss and establish boundaries together as they must be understood and respected by each household member, from the youngest to the eldest. Learn to pick your battles there will be general disagreements and niggles, but most won't be worth a fullscale argument. And it's important to remember that living on one property doesn't mean living in each other's pockets. Everyone needs a break from each other and time to themselves. Dual living with a paying tenant on the property is also an increasingly attractive option for cashstrapped homeowners. Geffen says: "Pi rental income can help to pay off your home loan faster, and also enables firsttime buyers to enter the market sooner. It might take a bit of time to find the right property, but it's worth the effort in the long run." And in a country where fewer than 10 percent of retired people are financially independent and the Reserve Bank notes that we have one of the worst savings records in the world, Geffen says dual living is also an excellent way to help fund retirement. "Pi rental income enables younger homeowners to save in tough economic times. At the other end of the scale, active retired people can stay in their family homes longer knowing their living expenses are subsidised by an ongoing rental income stream." The most important factor for successful dual living is to ensure all inhabitants enjoy a measure of privacy Geffen says home owners need to carefully consider their needs and decide whether a separate, selfcontained dwelling would be most suitable or if converting or extending existing structures would suffice. "This applies to current homeowners who have the space to erect a separate dwelling and prospective buyers looking for conversion properties. "If you want to buy and build a separate dwelling, it's imperative to first check whether you'd get local authority planning permission before taking the leap. `And regardless of whether you intend to convert or build separately, always consult a reputable architect who'll draw up plans that don't contravene bylaws or zoning regulations. "Cutting corners to save a few rands in the short term often proves costly down the line, especially when you decide to sell and the sale is delayed or lost because the property plans don't match the current structures." She also cautions home owners to guard against the most.common pitfall, overcapitalising, which will not only diminish return on investment in the long term but could also defeat the object of earning a decent income in the short term because the costs outweigh the revenue. Geffen says: "In the current economy, whether you want to offset the rising cost of living or simply create a new income stream, dual living makes a lot of sense. "If implemented correctly it has far more benefits than disadvantages and will add substantially to the value of your property when you eventually sell." Renting out that granny flat is way to go This Cape Town dual living property incorporates Simon's Town's Whale Master's residence built in 1902, and is on the market for R9.7 million. The main house has four double bedrooms and a separate block has a onebedroom loft apartment and a duplex threebedroom apartment, both with sea views.

Author: Lew Geffen Sotheby's International Realty