Why go into construction?
I have always been creative. In my teenage years I had a keen interest in real estate and in the housing industry but wasn’t sure how to get involved in it. I love architecture and buildings in general, and the technical nature of how they are put together. To me, the construction industry is about tangibility. We create buildings and homes to feel, touch and use – you can point it out and say you were part of it.
You did a bachelor of building and construction at UON before heading to Sydney for a decade. What work did you do there?
My construction career began in 2002. Initially I worked as a contracts administrator then moved up to the project manager role, where I worked on high-end, multi-million dollar projects including fit outs, club construction, retirement villages and more. I was fortunate to work in some very successful businesses, for good people. Most of our contracts were of a design and construct nature allowing me to work with talented architects and clients. These experiences shaped me into the business owner I am today – in both a financial and social sense.
Why return to Newcastle to set up Nulex Construction?
Newcastle is home to my wife and I, so when we decided it was time to start a family Newcastle was our first pick – we wouldn’t want to live anywhere else. Ever since I was young, I knew I wanted to start my own business. I had known my business partner, Mark Neumann, for several years. We both had differing, but complimentary, skill sets and we saw a great opportunity to team up.
Why did you launch Backyard Grannys?
In 12 short months we identified a gap in the local market. We saw a niche in the Hunter region housing industry and the government had just changed the laws to make the granny flat approval process easier. It was perfect timing so Mark and I leapt at the opportunity to be first to market in the granny flat space.
What is the law around granny flats in NSW?
In 2009, the NSW Government released the Affordable Housing State Environment Planning Policy (SEPP). It permitted residential homeowners to build a granny flat on their property via a complying development certificate approval process if minimum requirements are met. Today, granny flats are permitted in all residential zones across NSW, subject to certain guidelines. For example, a granny flat can only be 60m², only one granny flat is allowed per lot, and the Building Code of Australia requirements must be met when constructing a new granny flat. Our team is well-versed in the world of granny flats so we are able to help our clients through the whole approval process.
The main challenges in the industry to date?
The biggest challenge we’ve faced internally has been building the experienced team we have today. We have worked hard over the years to develop and educate our team. This hard work has paid off and the growth we have seen is a testament to our team’s hard work.
Granny flats are popular for housing senior family members, a home base for grey nomads, home offices and newly married couples.Alex Mitchell
What age is the typical Backyard Grannys client?
Early on, investors were our biggest client demographic. Ages ranging from 35 to 60 were our main target, with more and more property investors building granny flats to maximise their return on investment. While investors remain a major client base, nowadays we’re building more for seniors. Families want their parents and grandparents close to home and with rising property prices, it’s much more financially viable to live on the same property. Granny flats are the perfect solution: they keep families feeling reassured while giving the elderly a sense of independence.
Pluses of a granny flat?
A granny flat costs roughly $125,000 to build and, in the Newcastle area, there is a rental return of about 12%. These positively-geared investments also provide the homeowners with substantial tax depreciation entitlements. We’ve also found granny flats are popular for housing senior family members, a home base for grey nomads, home offices and newly married couples saving for first home.
And the restrictions on those wishing to have it as a rental property?
In NSW, there are no restrictions on renting a granny flat. You do however need to declare income if it’s in your own backyard. The rules differ across Australia and in some states granny flat are not allowed to be rented out and may only be used for family.
How much has Backyard Grannys grown?
We started with a small team of eight people and have grown to have 50+ staff. We have a sales team, an approvals department, architectural designers, project managers and our hardworking team in the field.
How does it compare to Nulex?
There has been some big growth in Backyard Grannys, even in the early stages we expanded rapidly. Two years after inception, Backyard Grannys was equal to the turnover of Nulex Construction. Right now, it turns over double of what Nulex Construction does, which surprises many. As the old saying goes, “good things come in small packages” and Backyard Grannys is punching above its weight!