---
title: "6 Sweet Gum Avenue: The Narre Warren Property Paying $935 a Week After One Addition"
description: "Full breakdown of 6 Sweet Gum Avenue, Narre Warren: purchased at $762K, granny flat added, $935/week combined rent, bank revalued at $845K in 4 months. Real numbers inside."
author: Yan Zhu
date: 2022-11-14
category: Market Analysis
url: https://premiumrea.com.au/blog/sweet-gum-avenue-narre-warren-granny-flat-case-study
tags: ["Narre Warren", "granny flat", "case study", "dual income", "rental yield", "bank valuation", "Melbourne southeast"]
---

# 6 Sweet Gum Avenue: The Narre Warren Property Paying $935 a Week After One Addition

*By Yan Zhu, Co-Founder & Chief Data Officer at PremiumRea — 2022-11-14*

> When we settled on 6 Sweet Gum Avenue, the numbers were already decent. A three-bedroom house on 620 square metres in one of Narre Warren's quieter pockets, purchased for $762,000. Rent as-is would have been about $520 a week. But 'decent' isn't why we bought it. We bought it because of what was hiding in the backyard.

I want to walk you through a property that demonstrates, with real numbers, why the granny flat strategy outperforms almost every other value-add approach in Melbourne's southeast.

6 Sweet Gum Avenue, Narre Warren, VIC 3805.

Purchased: $762,000. Four months later, bank valuation: $845,000. Current combined rent: $935 per week. That's a gross yield of 6.4% on the purchase price, and 5.8% on the current valuation.

These aren't projections. These are actual, realised numbers from a property that's been tenanted and cash-flowing since early 2020. Let me show you exactly how we got here.

## Why this property, on this street

Sweet Gum Avenue sits in a pocket of Narre Warren that most investors overlook. It's not on the main road. It's not near the train station. It's a quiet, tree-lined residential street where families with young children live and retirees potter about in their gardens.

That anonymity is actually the point.

Properties on quiet streets in established pockets carry a premium that's invisible until you try to rent them out. Tenants — good tenants, the kind who stay for three years and maintain the property — want quiet streets. They want cul-de-sacs. They want to park their car without worrying about through-traffic. Every property manager knows this, and the rental data confirms it: vacancy rates on quiet residential streets are 20-30% lower than on arterial or collector roads [1].

6 Sweet Gum Avenue had three features that made it stand out from the 40-odd properties I assessed that month:

1. **Block size:** 620 square metres, flat, rectangular. No slope, no easement through the buildable area.
2. **Side access:** 3.8 metres — wider than the minimum 3.0 metres council requires for a granny flat build, which means trucks can deliver materials without removing fences.
3. **Existing sewer connection:** The sewer line ran within 2 metres of the proposed granny flat location. Connection cost: $2,800 instead of the $10,000+ that kills the budget on many projects [2].

The house itself was a 2002-build brick veneer. Three bedrooms, two bathrooms, single garage. In reasonable condition — no structural issues, no termite history, no rising damp. The kind of property that doesn't photograph well on realestate.com.au but performs beautifully on a spreadsheet.

## The build: what $110,000 gets you

We built a 60-square-metre granny flat in the backyard. Two bedrooms, one bathroom, open-plan kitchen and living area. Same spec we've rolled out across dozens of projects — timber frame, concrete slab, Colorbond roof, split-system heating and cooling, SPC flooring throughout.

Construction took 13 weeks from slab pour to handover. Council approval took 7 weeks before that. Total timeline from settlement to granny flat being rentable: just under 5 months.

A few specifics worth noting:

- We matched the Colorbond roof colour to the main house. This sounds trivial, but it matters at council level — planning officers look favourably on secondary dwellings that visually integrate with the existing streetscape.
- We installed a separate electricity meter for the granny flat. This means each tenant gets their own electricity bill, which eliminates the most common source of dual-tenancy disputes.
- We fenced the backyard to create defined private spaces — the main house retains a 120-square-metre rear yard, and the granny flat has a 25-square-metre courtyard with a clothesline and a small garden bed.

Total build cost: $110,000 plus GST. Including the sewer connection ($2,800), rainwater tank ($1,200), and landscaping ($1,500), the all-in cost was $115,500 [3].

## The rental performance

Main house rent: $580/week. Granny flat rent: $355/week. Combined: $935/week.

I want to contextualise those numbers because on their own they might sound either impressive or ordinary depending on your reference point.

The median rent for a 3-bedroom house in Narre Warren in early 2020 was approximately $400-$430 per week [4]. We're renting the main house at $580 because we did a $12,000 cosmetic refresh before listing — new paint throughout (Dulux Natural White, because it photographs well and appeals to the widest range of tenants), SPC flooring in the bedrooms and living areas ($62/sqm installed), new tapware in both bathrooms, and a kitchen splashback.

That $12,000 spend pushed the rent from an expected $430-$450 as-is to $580. That's a $130-$150/week increase for a $12,000 outlay — paying for itself in under 20 weeks.

The granny flat at $355/week is at market rate for a 2-bedroom secondary dwelling in the Casey LGA. Demand is extremely strong — we listed it on a Thursday and had 14 enquiries by Saturday morning [5]. The tenant we selected has a rent-to-income ratio of 26% (well below our 30% maximum), works within 10 minutes of the property, and has two years of clean rental history.

Combined annual rent: $48,620. On the total investment of $762,000 + $115,500 + $12,000 = $889,500, that's a gross yield of 5.5%. On the purchase price alone ($762K), it's 6.4%.

But here's the kicker.

## The revaluation: $83,000 in four months

Four months after purchase, we requested a bank valuation from CBA for refinancing purposes.

Result: $845,000.

That's an $83,000 increase — 10.9% — in four months. And it happened for two reasons:

1. **The granny flat added assessed value.** Banks don't value granny flats dollar-for-dollar against build cost, but they do add rental income to the property's assessed market value. A property generating $935/week is valued differently from one generating $430/week. The income approach alone justified a significant uplift.

2. **The market moved.** Narre Warren's median was growing at roughly $5,000 per month through early 2020 [6]. Over four months, that accounts for about $20,000 of natural appreciation.

So roughly $60,000 of the uplift was manufactured (granny flat + renovation) and $20,000 was organic market growth.

The practical impact: the client's loan-to-value ratio dropped from 80% at purchase to 69% at the new valuation. That unlocked the ability to refinance, extract equity, and use that equity as a deposit for the next investment property.

This is the flywheel. Buy → improve → revalue → extract equity → buy again. It's how our clients go from one property to three in two to three years. Not by saving harder. By creating value and leveraging it [7].

## What could have gone wrong

Every case study is more useful when it includes the risks that were managed, not just the wins.

**Risk 1: Council refusal.** Granny flat approvals in the City of Casey are generally straightforward on lots over 500 square metres in the General Residential Zone, but they're not guaranteed. Our risk mitigation was simple: we had our drafter prepare full plans including shadow diagrams and drainage calculations before we made an offer on the property. If the plans hadn't been feasible, we wouldn't have bought it.

**Risk 2: Build cost blowout.** Granny flat construction costs have been escalating due to timber price increases and trade shortages. We locked in a fixed-price contract at $110,000 before the build commenced. The builder absorbed a $6,000 materials cost increase that hit midway through construction. This is why we use contractors we've built 40+ projects with — they honour fixed-price contracts because they want the ongoing volume [8].

**Risk 3: Dual vacancy.** If both the main house and granny flat sat vacant simultaneously, the client would be carrying a $762,000 mortgage with zero income. We mitigated this by staggering the tenanting — the main house was leased before the granny flat construction even finished. At no point was both dwellings vacant at the same time.

**Risk 4: Tenant conflict.** Two sets of tenants sharing a driveway can create friction. The 1.8m Colorbond dividing fence, separate entrances, and separate utility meters addressed this structurally. Eighteen months in, zero complaints from either tenant.

## The verdict on Sweet Gum Avenue

6 Sweet Gum Avenue is not an exceptional property. It's an ordinary house on an ordinary street that was purchased by someone who understood the numbers and improved it with a proven, repeatable process.

That's the point. This isn't a once-in-a-decade deal. It's a strategy that works on any 600+ square-metre block with side access in a growth corridor with strong rental demand. We've done it in Hampton Park. We've done it in Cranbourne. We've done it in Berwick. The street names change. The formula doesn't.

$762K purchase + $110K granny flat + $12K renovation = $884K total. Rent: $935/week. Yield: 5.5% gross. Revaluation: $845K in four months. Equity created: $83,000.

Our team manages this property through our in-house PM division. The owner's dedicated leasing manager handles a maximum of 50 properties — not the 170+ that industry-standard PMs juggle [9]. That's why the vacancy has been zero since day one. That's why maintenance requests get actioned within 24 hours. That's why the tenants stay.

If this is the kind of investment you want to build, start with the block. Everything else follows from the dirt.

## References

1. [SQM Research, 'Residential Vacancy Rates — Casey LGA by Street Type', 2020. Vacancy rate differential between quiet residential streets and arterial roads.](https://sqmresearch.com.au/graph_vacancy.php?region=vic-Melbourne&type=c&t=1)
2. [South East Water, 'Sewer Connection Guidelines for Secondary Dwellings', 2019. Connection costs by proximity to existing sewer lines.](https://southeastwater.com.au/residential/building-developing/)
3. [PremiumRea construction division. Granny flat all-in cost breakdown: $110K build + $2.8K sewer + $1.2K rainwater tank + $1.5K landscaping = $115.5K total.](#)
4. [Domain Group, 'Narre Warren Median Rent Report', Q1 2020. Three-bedroom house median weekly rent.](https://www.domain.com.au/research/rental-report/)
5. [PremiumRea leasing division. Granny flat demand metrics: 14 enquiries within 48 hours of listing in Casey LGA.](#)
6. [CoreLogic, 'Narre Warren Monthly Price Index', 2020. Median house price monthly movement.](https://www.corelogic.com.au/research/monthly-indices)
7. [PremiumRea case study. Narre Warren: $762K purchase, $845K revaluation (4 months), $935/wk combined rent, LVR drop 80%→69%.](#)
8. [PremiumRea construction portfolio. 40+ granny flat builds with fixed-price contracts, average build cost $110K.](#)
9. [PremiumRea property management. 1:50 PM ratio versus industry standard 1:170+. Zero vacancy rate on dual-income properties.](#)

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Source: https://premiumrea.com.au/blog/sweet-gum-avenue-narre-warren-granny-flat-case-study
Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent