23/06/2011 - 00:00

Granny Flats not just a backyard business

23/06/2011 - 00:00

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The founder of Granny Flats WA.com, Mike Nicholls, has brought a very 1970s concept into the new millennium, proving granny flats are much more than your typical, done-up ‘shed’ in the backyard.

The founder of Granny Flats WA.com, Mike Nicholls, has brought a very 1970s concept into the new millennium, proving granny flats are much more than your typical, done-up ‘shed’ in the backyard.

Mr Nicholls said granny flats were not just an accommodation option for grandparents, but could be used for adult children still living at home, for divorcees looking for a viable option and as a method of relieving Western Australia’s housing shortage.

Mr Nicholls has been in the construction industry since he was 21, when set up patio company Perth Home Improvements with his father in 1991.

At the age of 30 and wanting to branch out on his own, he formed Discount Home Improvements, which specialised in steel-frame additions.

“At that stage, steel-frame additions were becoming more accepted as a standard type construction and, as we continued growing and working on larger jobs, a number of our customers asked us to do granny flats for them,” Mr Nicholls said.

The demand for granny flats had increased sharply over the past five years, which saw his turnover grow 30 per cent year on year.

“The baby boomers’ parents were in their 80s and were becoming frail and I think it was a combination of factors which saw the growth of granny flats, such as the hesitation towards nursing homes and the affordability of houses, which was getting completely out of control from the 2006 to 2010 era,” he said.

Living in a granny flat also provided greater financial benefits for grandparents.

“By cashing in the $500,000 house they were living in and spending $120,000 on a nice granny flat, it freed up their cash so they didn’t have the issues associated with living on a pension,” Mr Nicholls said.

Discount Home Improvements rebranded itself as Granny Flats WA.com in 2009, which Mr Nicholls said was a strategic decision to save on marketing costs.

“People were looking at our website and, by having the granny flats name, we’re getting jobs of greater value straight off the cuff,” he said.

The company constructs granny flats as either an extension to the home or as a separate dwelling in the backyard, which has proven surprisingly popular with adult children living at home and divorcees.

“It’s becoming much more common with divorcees because when they split assets and end up with say $300,000, they often decide it’s more financially viable to build a granny flat in their parents’ backyard,” Mr Nicholls said.

The granny flats range in price from $80,000 to $120,000 and he said his constructions were as good a quality as any other new home.

“We’ve brought granny flats into being a very socially accepted method of build because the standard is the same as a duplex-type development of a brand new house,” he said.

“It is not a temporary structure either, it’s something that is custom built that is as good as, if not better than the standard of the 30-year home that the person was in before.”

However, Mr Nicholls said that getting approval to build a granny flat was an arduous process, with building regulations varying from council to council.

“In WA the approvals process is still quite archaic compared to Sydney and Melbourne, where if you conform to the guidelines, you can get a building approval within 10 working days,” he said. “Over here, we’ll be lucky to get a building approval within five months.”

Regulations stipulate that a granny flat cannot exceed 60sqm, must have a specific car bay allocated to that site, must be for family use only, cannot be rented out and must be on a block greater than 360sqm.

Mr Nicholls said councils should use their powers to amend the regulations in an attempt to lessen wait lists for one and two-bedroom rental properties.

“While there is a condition of having family use only there – you can’t rent them out and, by lifting that condition – it will put more rental properties out there, which will be low rental, for around $150 to $200 a week,” he said.

In an attempt to grow his business, as well as provide a possible solution to WA’s housing shortages, Mr Nicholls said he would begin a consultation process with the state government.

“We will try to get the government to assist in funding these (granny flats) for the benefit of community housing and to get people off the HomesWest waiting list, which I found out was 10 years,” he said.

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