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Thinking about a granny flat extension?

In recent years, there has been an increase in the number of granny flats being built across the country. Traditionally, the granny flat was a great way of taking care of ageing parents, but these days the benefits are many, not least being a great way to add value to your home, or for adding additional rental income.
What is a granny flat?

A granny flat is a popular Australian term used for a secondary dwelling on your property. They can be free standing structures, attached to your home, or rooms inside your home that are converted to separate accommodation.Generally speaking, granny flats are usually smaller than the primary home on the block, because most councils restrict them to being only 60 square meters in size. They also must be self-contained, which means they must have their own entrance, bathroom, kitchen, bedroom and living areas. Most council’s regulations regarding the definition of a granny flat include:• Granny flats can only be built on residential zone properties

• Granny flats must have unobstructed pedestrian access

• The block must be at least 450m2 to build a granny flat, and

• The owner of the granny flat must also be the owner of the primary dwelling.

Why would you build one?

The major benefit of building a granny flat on your property is the potential for extra rental income. With rental housing becoming increasingly scarce in capital cities, a granny flat can be a solid source of revenue for property investors and home owners alike.

In some suburbs of Sydney, a granny flat can generate as much as $450 per week – however in most other cities you can expect to receive between $150 – $350 a week depending on the size and location. In most cities, a two bedroom granny flat can achieve a similar weekly rent to a two bedroom unit.

If you are a property investor, building a granny flat and renting it out could be an inexpensive way of increasing your income yield. But it could also be a great way to generate extra income from your own home, particularly if you’re looking for ways to pay off your mortgage sooner and it has the added benefit of adding value to your home.

Before making a decision to build a granny flat on your property, it’s probably a good idea to talk to some local real estate agents to assess the demand for smaller properties in the local rental market. If you want to make an income, you need a ready supply of tenants willing to provide it. A real estate agent can tell you how much rent you might expect to receive for a granny flat in your suburb.

Making it happen

The most ideal properties for building a granny flat are corner blocks, because both dwellings on the property can have their own street frontage. This minimises privacy concerns and will make your granny flat much easier to rent. So if you’re looking to purchase a property and considering a granny flat to help pay off your mortgage, you should look for a corner block or one with front and rear street access.

The next step is to check with the local council to be sure that building a granny flat will be permitted on your block. Remember that to build or extend a property anywhere in Australia, you will need a permit. In some areas of Queensland, it is only permissible to build a granny flat if a family member will be living in it, and in some built up areas, housing density restrictions prohibit them entirely.

You should also carefully consider the costs of building your granny flat before making a commitment. You can get in touch with local builders and specialist granny flat construction companies to get a ball park figure. Alternatively, if you have a large house you can convert rooms inside the home into separate accommodation, which could be an inexpensive alternative to a free standing building.

Get your financing in place

It is important to have your finances in place from day one if you are embarking on any kind of construction or renovation project. Constructing a granny flat won’t cost as much as building a new home, so you may be able to finance it by accessing your equity, or perhaps by increasing or refinancing your current loan. Alternatively, you may be able to take out a construction loan to fund the project.

If you’re considering building a granny flat or doing any kind of renovation on your home, just give us a call. We’ll be able to determine how much you can afford to spend on your project and help you get your budget and financing in place before you begin, so the whole process goes more smoothly. We can even recommend a builder in most areas.


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