The granny flat is an immensely popular alternative living space that offers all the features of a regular home (a kitchen, bedroom, living room, and bathroom) but condensed into a small, cosy dwelling. While granny flats can be attached to the property’s main house, they typically exist as a self-contained structure with their own separate entrances and pathways. Because they can be built for far less than a conventional house and in a fraction of the time, it’s no surprise that investing in a granny flat is a growing trend. In this guide, we weigh up some of the major factors you should consider before deciding if a granny flat is a good investment for you.
As suggested by its name, granny flats are commonly used to house elderly relatives, allowing them to age in place. With Australia’s aging population and people living longer, this arrangement is predicted to become increasingly common. Cheaper than retirement homes, a granny flat can also be a more comfortable option for your loved ones, providing them with greater independence while still maintaining security and peace of mind, by living close to family members who can care for them.
Other demographics that are reaping the benefits of granny flat living are newlyweds, single parents and those looking to own their first home. Granny flats are also great for those looking to live in major cities or coastal towns, with granny flats becoming increasingly popular in Sydney, Newcastle and on the Central Coast.
One of the main reasons granny flats are soaring in popularity is because they can serve as a steady stream of income. Turn your granny flat into an investment property by choosing to rent it out to long term tenants, travellers on Airbnb or even by moving into it yourself and renting out your main house. Depending on the location of your granny flat, you could be able to generate several hundred dollars of extra income per week, making it a clever, cost-effective strategy. Because of this, a granny flat is a good investment for those looking to finish paying off their mortgage, increase their retirement savings or invest in more properties down the track.
Before you begin investing in a granny flat, you need to research your area’s specific regulations and consult with your local council. To avoid any repercussions, make sure you check with your local council and get approval before you start building or you may be at risk of getting fined. But as a general rule of thumb, you must ensure:
While getting council approval is arguably easier than ever before, different states will have different restrictions. For example, in some areas of Victoria, Queensland and South Australia, it is prohibited to use granny flats as a rental or investment property and only a “dependent” person is allowed to live in the dwelling. However, this is not the case in Western Australia, Northern Territory, Tasmania or in the ACT, as these regions do allow granny flats to be used as a source of income.
Investing in a granny flat can transform your overall living space, giving your existing property an attractive facelift and increasing its value. Creating a small, stylish home with beautiful landscaping and outdoor features can effortlessly elevate the look and feel of your entire property. Depending on your specific needs and whether you are building from scratch or using an existing model, constructing a granny flat can cost anywhere from $20,000 to $200,000.
Owning a granny flat means having an investment property in your own backyard. With its close proximity making general maintenance and upkeep a breeze, a legally compliant, well-maintained granny flat could help you sell your property at a higher value.
Even if you’re not looking to rent, granny flats are still a good investment if your family’s lifestyle and dynamics are changing. Versatile and multi-purpose, granny flats can provide you and your family with a handy space that can serve endless possibilities. A granny flat can offer the best of both worlds — a space that perfectly balances separation from the primary household but not too far away that it feels overly removed or distant. This can be particularly useful as children grow older and require more independence but may not be ready to move into a place of their own.
A safe, quiet place to study, learn a new hobby, work on a project or simply store possessions — the granny flat is a versatile, practical option that can provide any family member with some breathing space. Whether it’s being used as an impressive guest house or your own little retreat, investing in a granny flat is a clever way to make the most of your property.
As an Australian family business with over 35 years of industry experience, we have witnessed time and time again the benefits that can come with investing in a granny flat. Ready to get started? Having built over 400 granny flats, our expert team will work with you to get both design and approval sorted in just three weeks. When you choose us you can do so with confidence — because if for whatever reason you’re not completely satisfied, we will continue to work for free and rectify any issues at no further cost to you. To get both a free site inspection and quote today, simply fill out a quick enquiry form and we’ll get back to you as soon as possible.