Oct 25, 2015: Pros and Cons of Granny Flats

Hello again and thank you very much to all the readers who sent congratulatory messages following our Green Globe Award announcement last week. So far the award hasn’t led to anything too exciting but you’ll be the first to know if and when that changes. Meanwhile we keep plugging away.

This week I’ll be presenting at the ‘Southern Highlands Investment Summit‘ to be held at Peppers Craigieburn Hotel on Thursday, Oct 29th. This full-day event has been organised by the Wingecarribee Shire Council as part of their ‘Fit For the Future’ planning process. ‘The Investment Summit is an opportunity for investors to partner with Sector Groups and support specific projects.’ I will be presenting on behalf of the ‘Shelter’ Sector Group. I will very briefly explain why we need affordable, adaptable, sustainable buildings; the benefits of a home like the Greeny Flat; and a number of ways these opportunities and benefits can translate into economic development opportunities in our local area. Anyone is welcome to attend and you can register via the link above.

The Cases For and Against Granny Flats

Last week I had some interesting correspondence with a reader/architect who is also investigating ways to develop a business designing and building small, affordable, sustainable homes.

I sent her this article from ‘Domain’ entitled ‘The Rise and Rise of the Granny Flat’. While it is fairly specific to the current situation in Western Australia, much of it is also relevant to us here in the East. The article outlines some of the reasons granny flats are becoming so popular, one of which is for elderly family members.

‘With accommodation bonds for aged care facilities starting at about $50,000 and topping $800,000 in some extreme cases, Mr Nicholls said he believed granny flats, in conjunction with assisted living arrangements, were becoming a popular option for families.

In 2011, most Australians aged over 65 years old lived in a private house with a husband, wife or partner, according to census data released in April.

Strikingly, only 26 per cent of people aged 85 years and over lived in aged care facilities or retirement villages, which had dropped from 39 per cent in 1999.’

I was fascinated to read that there is such a low percentage of elderly people living in aged care facilities and even more amazed that the percentage has gone down so much since 1999. But there are other reasons people are building granny flats including as accommodation for young family members starting out and as rental properties. The rental situation is about to change in WA where, I was also amazed to read, you cannot rent out a granny flat, only a direct family member can live in one… not even a carer is allowed to use one. The article points out that the imminent relaxing of these rules is likely to spur a stampede in granny flat building.

In response to this article, my friend sent me one with an opposing view of granny flats. This article from ‘propertyupdate.com.au’ lists the pros and cons of granny flats and concludes that ‘while you may increase your rent and turn your property investment from negatively geared to giving some positive cash flow, for mine if you’ve got $100,000 or so to spend on a granny flat you could generate a much better return by putting it towards an “investment grade” property.’

These are all good things to consider when contemplating whether or not to build a granny flat. To my way of thinking, the thing that makes granny flats financially attractive is the fact that the land is already paid for. If you have a vacant back yard with good access you can potentially spend $150,000 to build a small house that you can rent out for at least $300/week in this area (probably more in Sydney). That makes a gross return of about $15,000/yr or around 10%. Obviously there will be some expenses to deduct from that so the net return will be less but it’s still a pretty interesting option in the current low-interest rate environment. But there is certainly cause to consider whether a $150,000 investment will add $150,000 to the total value of the property. There is much to ponder.

None of the above is intended as financial advice so please consult your own financial and real estate advisers if you are considering building a granny flat.

A Glimpse of the Future?

Carbon-fibre, 3D-printed, wireless power-sharing, vacuum-insulated house and electric hybrid car.

This week I also came across this intriguing article on Gizmag about a recent project at the Oak Ridge National Laboratory. This US Department of Energy research project involved building a 3D printed house and car that share energy generation and storage capabilities. The house has solar panels on the roof (and battery storage) while the hybrid vehicle has a gas-powered generator (and battery storage). So, during the day the house generates power from the solar panels and stores it in its batteries. If the car is out on the road it can draw power from either its batteries or its generator. When the car is at home, it automatically communicates with the house and the two can share their power generation and storage capabilities. The house can draw power from the car batteries; the car can charge its batteries from the house’s solar panels; the house can also call on the car’s generator for extra power when the batteries are low; or the house can use the car’s generator to charge its batteries. This makes for a fascinating concept, especially because the house and car connect with each other and share power via a ‘wireless transfer system’. I can’t quite fathom how they can share power wirelessly but the article claims the system is ‘roughly around 85 percent’ efficient. I’m also not sure why they wouldn’t just use some sort of plug-in connection that would be roughly around 100% efficient but, in general, it sounds like they’ve been having a wonderful time trying to dream up a better future…

‘In the AMIE demonstration project, we are trying to illustrate what our future might look like if we shared our energy streams for buildings and transportation, using additive manufacturing as a tool to drive rapid innovation,’ ORNL’s Roderick Jackson, who led the AMIE demonstration project, told Gizmag. ‘The challenges we face can’t wait for the innovation cycles that currently exist for our buildings and vehicles energy ecosystem. These challenges include electricity outages caused by extreme weather events, energy poverty around the globe, and intermittent renewable generation.’

I recommend watching the video at the end of the article. It’s thought-provoking stuff. I think I would enjoy a job at the ORNL, spending vast amounts of tax-payer’s money on cutting-edge research and development. I’m also particularly interested in the wall panels for the house which the article describes as ‘cost-effective vacuum insulated panels’…

‘One of the interesting energy saving features is novel modified atmosphere insulation (MAI) panels developed by NanoPore that are about seven times more energy efficient than traditional wall insulation…’ They are 3D-printed using ‘Carbon fiber-reinforced ABS plastic composite material’… sounds pretty expensive to me… time will tell whether this really is ‘cost-effective’ and whether it becomes one of the building materials of the future.

3D Print a House in a Day

While on the subject of 3D-printed houses, the ORNL house was printed in pre-fabricated sections that were put together on site. But what if you could simply print your whole house on site… in one day! That’s exactly the concept that this article from realestate.com.au describes. Under development at the University of Southern California, this kind of technology could rapidly and fundamentally change the way we design and build homes and other buildings.

University of Southern California’s on-site 3D home printer.

The one thing about this article that really got under my skin was the part where they discussed the possibility of using this technology to print buildings on Mars. Don’t even get me started on why I think this whole push to colonise Mars is complete and utter insanity. This Newsletter is long enough already, I’ll have to leave that particular rant for another day…. stay tuned.