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How to make money from a second dwelling

There are number of restrictions to consider when building a second dwelling. Many councils have size restrictions of around 70sqm on a second dwelling but different councils have different rules and it's always worth checking with your local authority (or working with Genius Homes as we do that as part of our process)!

There are a number of benefits to having a second dwelling on your property. Besides having extra space for large family gatherings, or a great spot for visiting guests you can see some tangible financial benefits for yourself and your loved ones by investing in a second dwelling.

In this article we'll explore a few of those advantages and discover how a second dwelling can make you money.

Young Family

We're not suggesting you charge rent on the teenage child living in your second dwelling but you can put a maturing child in a great financial position by letting them have their own space while they save for uni, or for that big OE.

Even 'kids' in their twenties are returning home, often with partners, to get their savings together in order to put a deposit down on a first home. Giving them a place to call home, with the freedom to live their own lives, can keep the peace between generations while helping them get the foot on the housing ladder.

Second Income

Once your second dwelling is vacant you can open it up to short or long-term rentals to provide an easy second income (perfect for that child now at university, or for an up-and-coming wedding or even a much needed holiday)!

Websites like Airbnb allow you to rent out spare rooms, flats or cabins to holidaymakers or tourists looking for a low cost accommodation that's a bit of a different experience to hotels and campsites. This is a great option if you want some flexibility around when people can or can't stay, or if you don't want to be tied down into long-term tenants.

Older Family

Granny flat accommodationA 'granny flat' second dwelling enables you to move an elderly family member close to loved ones when they need caring for. Losing your independence is never nice and this enables your older relatives to maintain theirs whilst enabling you to keep an eye on them. This can go hand-in-hand with putting their home on the market, which might be a necessary option for paying for medical bills or any just freeing up some extra cash.

Obviously if you own a farm or similar then the second dwelling can be worker accommodation, which can often help negotiate a lower salary as it forms part of the compensation package. However, in most cases even residential home owners can see benefits from putting a second dwelling on their land.

Restrictions in some regions aren't limited to the building's size and it's worth checking with a Genius Homes specialist, or your local council, as to unique requirements for your area.

What restrictions are there on a second dwelling?

The information below is for guidance only and correct at the time of original transcription. Always check with your local authority or call us for the most up-to-date information.

As a general rule, if the floor area of your secondary building is under 10 square metres, with no kitchen or bathroom, it probably won’t need permits. But if you include a bathroom or toilet in your accessory building, you will need a building consent.

If you want to add a kitchen or kitchenette, you will need a resource consent as well as the building consent. In some council areas, you also pay a development contributions fee and more rates because authorities consider that another household unit creates more load on the area’s infrastructure.

It’s definitely worth asking your local council to find out what’s allowed in your area. Here’s a few guidelines to give you an idea:

Selwyn District permits family flats as an accessory to the main dwelling are permitted, provided that they comply with the following restrictions:

• They must comply with the relevant bulk, location and relocation requirements for a dwelling on that site.
• They can be no more than 70 square metres in size (excluding any garage).
• They can only be lived in by someone of the same immediate family as someone in the main dwelling on the site.

In the Rural zone, the number of dwellings you can have on a site depends on the area of land held in that Certificate of Title. For example, according to the Selwyn District Council in the Outer Plains, you are entitled to one dwelling per 20ha, so if a Certificate of Title contains 40ha, then two dwellings are permitted, provided that the relevant bulk and location requirements are met.

Waimakariri District Council allow 2nd dwellings to 75sqm but they must be within 30m of main dwelling. There are also restrictions on the number of dwellings for the size of your land.

Timaru District Council allows 2nd dwellings in residential 1 zones as long as there is 300sqm of area per dwelling. So if you want to add a 2nd dwelling to your section with an existing house your land area needs to be larger than 600sqm plus allowing extra space for access and driveway. To view the district plan, visit the Timaru District Council website.

Also consider how your 2nd dwelling will be connected to services like Sewer, water & electricity. If you’re in a rural location you may need a potable water supply such as rain water or private water bore and an effluent disposal system.

As with anything it's worth talking to people that do this sort of thing often. The questions you ask have probably been asked before and we'll have a solution to hand! We are also likely to be able to make you aware of issue you aren't yet aware of.

A quick chat is easy and we have specialists on hand to assist with your plans. If you're interested in tapping into the many benefits a second dwelling can provide download our free second dwelling brochure by clicking the image below. 

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