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Granny Flat Benefits – 7 Advantages to Build a Granny Flat

granny flat advantages

Building a granny flat can have many advantages over putting your hard-earned money towards other forms of investments. Here are 7 Granny Flat Benefits:


  • Additional rental income.
  • Ability to rent for “short term” stays – for greater income.
  • Cost to build as cheaper than a single-family home.
  • Far less Council costs (in most cases), than a single-family home.
  • Construction time can be as low as 12 weeks.
  • Safer and secure being away from the street.
  • Add value to your property.


Today I will cover these and more below…


Additional Rental Income


DON'T PAY A FORTUNE FOR YOUR GRANNY FLAT. Find out how to deal with council and build a granny flat for the lowest cost possible. Learn More.

Reports have shown that a granny flat on the average house in Sydney can increase the rental return by 1.1% – from 2.5% to 3.6%. That equals a total of $300 more every week.


PLUS: I suggest that you have a look at airdna.co to see what rental income, you can get from your granny flat for short term rental.


Their program takes a neighbourhood near you, showing you what rental return and vacancy rate you would expect for you area.


Ability to Rent for “Short-Term” Stays


A granny flat can also be looked at as a place to rent out for “short-term” stays. Think of it like a business, rather than a place to rent continually. That is, it can be used as a vacation rental on Airbnb. If so, you have the opportunity to get an even greater income.


You will just have to be willing to do more work, including:


  • Cleaning
  • Changing the bedsheets
  • More maintenance
  • Considerably more preservation to the landscaping


These things all take time and cost money, but there are ways to keep them under control. It may be an option worth thinking about, if the money you will be making is more than the money you will be spending.


short term rental granny flat

It requires more work to prepare a granny flat for guests. But can earn you more in the long run.


It is important to note that, to make this calculation work in your favour – that is, to be able to make a greater income using Airbnb – there are two very important things that short-term rentals must have to succeed – location and presentation.




Regions that have a bigger population or reach substantial heights in the tourism industry will be a cut above the rest. Think of areas such as Sydney or Melbourne. Although in NSW even Terrigal on the Central Coast or Mollymook on the South Coast will astonish you with how well they can do.


So essentially, if your granny flat is in a region that is sought-after for things such as:


  • Tourism.
  • A short holiday (i.e., a weekend break).
  • Weddings.
  • Corporate functions, or
  • Manufacturing.


The majority of people are astounded – though pleasantly so – at how well such regions can do on short term rental platforms.




So, you’ve already figured out that you have a location that is ideal for a short-term rental. If you are eager to go down this route, the next important factor to think about is presentation.


The number of bookings you receive will be dependent on how your granny flat on Airbnb appears. That is put together from:


  1. Images.
  2. Description, and
  3. Reviews.


If you have a professional photographer take photos of your granny flat, fully furnished, this will set your listing apart from, and above, all the other granny flats near you. The next important details to ensure your success are writing a very specific listing description, and having this confirmed by real-world reviews.


Do these things properly, and you could be bringing in an income greater than the average rental makes in your region.


Cost to Build is Much Cheaper than a Single-Family Home


The cost to build a family home in Australia can vary widely, but reports show the average cost in 2018 was $313, 800.


Whereas, the average cost to build a granny flat using a building company, with standard inclusions ranges from:


  • One-Bedroom Granny Flats – Generally $85,000 to $100,000.
  • Two-Bedroom Granny Flats – An average of $130,000.
  • Three-Bedroom Granny Flats – Roughly $150,000 to $180,000.


Keep in mind that not all costs are included. Extra costs include:



However, it is possible to build your own granny flat for even less. You can see the record of my costs where I built the whole lot for $91,074.64.


Or, if you want to choose a budget option, such as a flat-pack (kit home), it is possible to build a granny flat for:



Far Less Council Costs (In Most Cases) Than a Single-Family Home


In most cases, the Council costs for a granny flat are far less than that for a single-family home.


The cost of a building permit alone all depends upon the extent and size of the building works. So this can vary between $500 – $2000 or more. I paid $1600 just for the private certifier to help with obtaining our Construction Certificate all the way to our occupation certificate for our 2 bedroom granny flat.


Then, as this article shows, the planning approval process for a single-family home is far more complicated than that of a granny flat.


Unlike a granny flat, with a home there is no such thing as the SEPP, so a home cannot be approved by Complying Development (CDC).


Instead, a home must be assessed against a planning scheme, and many people have attempted to seek this planning application themselves before, only to have been held-up as they gave inadequate information, such as poor drawings. And not providing all the information council needs.


If approved, Council fees also depend on the size of the project, and how much it costs. They can range from as little as $188.20 to over $50,000.

Planning permit application process


This sample plan from the City of Boroondara, Victoria, shows you what information is required, when various authorities need that data, when you might expect to pay certain fees and what other steps are likely to be included in this phase of building a new home.


1. Before applying

    • Find out about the planning scheme for your local council


granny flat planning process

Planning right means you can save headaches in the future

  • Talk to the local council.
  • Talk to the neighbours.
  • Consider getting professional advice.

2. Prepare and submitting your application

  • Application information needs to include plans drawn to scale, showing the site, floor layout and elevations. Plans should clearly identify existing and new buildings, floor levels and site levels, as well as any earthworks and vegetation removal. A schedule of materials and colours is sometimes also required.
  • Fill in the application form.
  • Pay the application fee.

3. Council checks application

  • More information may be sought.
  • Referrals may be made to external authorities, such as water boards.

4. If required, application is advertised for 14 days

  • Usually by letter to the neighbours and a sign on site.
  • People affected may object.

5. Council assesses application

  • Consider any objections.
  • Hold mediation meeting, if needed.
  • Considers any referral comments.
  • Assesses planning scheme provisions.
  • Negotiate with permit applicant, if necessary.
  • Prepare the report.

Construction Time Can Be As Low As 12 Weeks


I say if you are building your own, as an owner-builder, even if you have no experience building anything previously, give yourself roughly 3-6 months to build yourself a brand new granny flat.


Whereas, if you choose a prefabricated granny flat, these are built off-site, in 10 or more days, then delivered to your site, fully constructed and ready to move in.


But if choosing a builder and designer to custom-build you a granny flat, their entire process generally takes up to 14 weeks for most companies.


These additional few weeks account for everything that you might forget about, including:



All of this is required before building can even start. The time frame may still be delayed by things such as:



Safer and Securer – Away from the Street


As a landlord, protecting your property, your belongings (if it is furnished), and your tenants, is one of the most important things to consider.


But reports show that one out of every four Australian households have been burgled, so that does little to put your mind at ease.


Though, having a granny flat at the back of your property means you are both more safe and secure.


Some safety tips to keep your home and property secure include:


  • Get to know your neighbours – As they might notice, and recall, any abnormal activity if you are not home.
  • Make sure it looks as though someone is always home – So if you do go away, you can ask your neighbours to bring in your bins and get your mail.


If you have a granny flat, your tenants will be your neighbours. You will be able to ask them to do the above for you, and vice versa, so both of you are protected from any questionable behaviour.


Add Value to Your Property


Does a granny flat add value to your property?


The short answer is yes. The long explanation can be seen here.


In simple terms, a granny flat may not always add value to your property, if the granny flat was more expensive to construct than what the property is valued at. The value of a property is measured by how much a buyer will pay, and not every buyer may see the huge value of having a granny flat.


Having said that, a granny flat can bring you value simply by the rental income it can earn. It may take time to earn back your initial investment through rent alone, but once that has been covered, the extra rent is definitely added value.


If Rented You Can Always Keep an Eye on Your Property

If you granny flat is permanently rented, you are always able to observe and manage the property. This makes it far easier to take full responsibility of all the duties that come with being a landlord, such as:
  • Ensuring the structure of the granny flat is well maintained.
  • Looking after the safety of the occupants.
  • Making sure that all fittings, appliances, and utilities are working. (Most problems with property are those which are not fixed right away)
  • Gathering the rent from the occupants in a punctual fashion.
  • Occupants of a property aren’t generally late with rent if they know you are next door.
  • Easier to carry out regular inspections, to check the tenants’ are keeping your granny flat in a good condition.


You will also have clarity that all stipulations in your rental agreement are being complied with. Such as; Can Electricity and Water be included?


You Decide Who Will Be Your Neighbour


One of the most important decisions you will make as a new owner of a granny flat, becoming a landlord, is choosing your occupant/s.


This is the person/people who you will be entrusting to:


  • Live on your property.
  • Pay the rent on time, and
  • Keep your granny flat in a suitable state.


One of the best things about having a granny flat is not only do you get to choose who this will be, but they will be living next door to you.


Much Easier to “DIY Build” Than a Family Home from Scratch to Save Even More


If you don’t know my story, even though I had never built anything before, I built my own granny flat from scratch while still working in other business’.


When I finished building, I created this website that has the answers to all the questions that I needed to know before I started building.


Just a few pages that you may find will help you solve any queries you have, enabling you to get started on building your granny flat, are:



I hope these will inspire you to get started building your granny flat.


Though it is possible to “DIY Build” a family home, it will take more time, and require more professional help – both of which cost more money.


For example, this family home was built by a couple, who are both architects. This family home was built by a couple who have experience in carpentry and interior design.


Keeps Multigenerational Families Together


Today’s society is gravitating towards houses that include a granny flat to allow for multi-generational living. Such a simple design makes it possible for families to have the safety of living near your loved ones, yet not giving up your space or your privacy.


An ideal set of circumstances to build a granny flat for multigenerational use is as somewhere lovely for your elderly parents to age.


A 2017 report showed that the people of Australia are aging, with the elderly becoming a larger portion of our entire population. 3.8 million people, or 15% of Australians, or more than 1 out of every 7, were the age of 65 or above.


This portion was also predicted to rise continuously in the future decades. As our population is growing older, it is becoming more and more popular for elderly parents to share a home with their children at some time later on in their lifetime.


Advantages of a granny flat in this situation includes:


  • It enables your elderly parents to depend upon their adult children if needed, whilst still retaining a level of independence and privacy.
  • While keeping your aging parents nearby, they will not infringe upon your privacy.
  • Unlike a dwelling in a retirement home, you own the title of the land. A retirement home or similar can be expensive to buy into, and their entry and exit fees can be fairly high. Whereas, building a granny flat can add value to your property.


Helps Kids Save for Their Own Home Deposit


Every parent wants to help their children kick that great Aussie goal – that is, owning your own home.


Unfortunately, the rental market in most areas of Australia continues to escalate. So, this high cost of living is making it harder and harder, close to unfeasible, for most of the young generation to save the money required for their home deposit.


But your young adult children could live in your granny flat, using it as a mid-way point on their road to self-sufficiency, and stop wasting money on rent.


The $300 – $400 a week they were paying in rent could become $150 they pay to you, while boarding in your granny flat. They will be saving $150 – $250 a week – this is money that can be put aside, until they have enough for a deposit.


Helps Retirees with Additional Income


A granny flat makes it possible to earn two lots of rent off the one block of land.


You are also making sure that, at all times, without fail, you will get rental return from at least one of the properties, as it is doubtful that both the primary and secondary dwelling will be unoccupied simultaneously.


Retirees will benefit from moving into the smaller dwelling, the granny flat, as it is a lower maintenance, brand new home. They can then rent out their larger home, the main home, to get a steady stream of weekly income.


Depending on things such as the size of the main home, its’ location, condition, etc. This income can often far exceed what they are paid on the pension.


Extra Room for Guests or the Creation of a Teenage Retreat


Think of a granny flat as a multipurpose room.


It can be lovely to have an extra space to house your guests, such as friends or relatives, when they come to visit. Especially when that space allows them their own room and privacy. Or, as your children get older, they get louder, and begin to long for more freedom, privacy, and a space that they can call their own.


A granny flat is the ideal solution for both.


Your teenage children can move out of the house without actually leaving home. Years later, if your kids ever do leave home, the granny flat can be used as an extra room for your guests. It can be a very good feeling to know that you can put a roof over the head of your children or your loved ones when they need it.


If you are considering this option, a detached granny flat is a wise idea – they will give you all the additional space you require, while keeping away all the extra noise and mess that your teenage children can bring.


Home Office and Working from Home a Breeze


A granny flat as a home office can make working from home oh so simple. Running a business from home is an increasing trend, as there are benefits, both personal and financial.


These include:


  • Wake up when you are ready, as you can set your own hours that suit you and your family. You also save time, as your office is right outside your door.
  • Just step outside and you have arrived – no driving and waiting in standstill traffic, or waiting for your bus or train in the cold rain.
  • No driving/catching public transport also means no travel expenses, such as paying for fuel or parking.
  • Work in comfort, wearing what you like and sitting on what you like – a bean bag is my preference.
  • Appreciate where your work, close to your family.
  • Take pleasure in the capital growth it brings, instead of paying expensive rent for a commercial premise.
  • You will save even more money, as you do not have to pay rent when you are on holidays.


It is just important to keep your home office separate from your primary dwelling.


By doing so, you are not only generating what is a far more professional environment, but it means you can still keep your work life disconnected from your home life, which is highly important for your work/life balance.




I hope that this article has helped you see the many benefits of building a granny flat.


If you’re still unsure, “Granny Flat Investments – Are They a Good Investment or Not?” may help you decide.