Build on Existing Property or Buy?

grabngo on 10/03/2017 - 16:06

My dad lives in a old house(Rents) and has a corner shop and a decent size block at the back.
They are considering building a granny flat at the back for approx. $100k.
I said to them to go out and buy a house for approx. $200k.
He can get a 2 bedder 1 bath house.
He lives in a rural town in qld where property is still cheap.
This way when he finishes at the shop he feels like he is going home and not just staying on the property.
He may also make some money if he bought a house in the long term.
What would u do?

Home & Garden

Comments

  • [Deactivated] on 10/03/2017 - 16:13

    Why would you invest $100k into someone else's property if that's the case as you said your dad rents. I'd buy your own.

    • humdingaling on 10/03/2017 - 16:32
      +1

      i think the OP means
      his dad currently rents a house which is seperate to the corner shop (of which he owns)

  • toniyellow on 10/03/2017 - 16:32
    +1

    There are advantages to building out the back of the shop. No commute to work. Personally once I locked up the shop I would feel like I was not at work, even if I was at the same property, but that is me. Better for security - he'll hear burglars if they break into his shop and could call the police

    The advantage to buying a new property to me seems to be that when he retires and sells the shop, he can stay in his house, he doesn't have to move and sell the shop in one go. The fact it is a rural town, I am not sure if he will make money in the long term buying the house. How rural is it? What are the chances of property prices rising in his town? Building a granny flat would add some value to his shop as well. I don't think you should rule out that option without more research.

  • MITM on 10/03/2017 - 17:01

    Retirement income = rent from shop + rent from (new)granny flat. Free to move to wherever (Sea/treechange retirement village)
    Outgoings = only 1x rates

  • grabngo on 10/03/2017 - 17:28

    He is renting where he lives at the moment.
    I do realise that the price to buy a house is 2 x but don't u think when he finishes work for the day,he feels like leaving his work at work?
    PS Granny flat would be brand new and top knotch too for $100K !

  • chumlee on 10/03/2017 - 18:30

    Check with council as sometimes a granny flat incurs seperate rates

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