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Granny Flat Builders

1 year ago No comments

Building a granny flat for your investment property

Granny flats is an idea whose time has come and hence hard to fight. There are so many advantages associated with these types of structures. They are basically small studios that provide additional liveable space for aged parents, growing teenagers or visiting in-laws. It can also be a special place to decongest the main house and act as a secondary home. Since it is allowable in certain situations where the legal factors are complied with, it is also seen as a nice investment opportunity that actually adds value to your home. Many builders and investor homeowners are advocating for it with the objective of increasing business and profits.

Australia laws are seen to be in the same wavelength with the idea of granny idea both advocating for cheaper housing. However, you will have to confirm with the regional councils whether the project is legal or not.

Granny flats economics

Building of granny flats is now a popular trend in Australia. Some of the homeowners are not well informed. They build out of temptation from what they see in the neighborhoods. You need to be equipped with the economics behind building the small studio or otherwise, your project will not be viable. Note that popularity on its own is no guarantee that the granny flat is an ideal investment. Perhaps looking at both sides of the coin will bring it out better.

  1. Pros
  • There is a possibility of additional rental income if you get tenants to occupy the flat
  • Presence of a well-designed granny flat increases the value of your home selling at a higher price than when it was just a single house
  • You have a reduced risk for cash flows. This one applies to those with a single property. When the main house is vacant, the granny flat may be occupied bringing in some income which is better than nothing at all
  • It comes with family benefits including creation of additional living space for the teenagers, your granny, in-laws, guests etc.


  1. Risks
  • It’s a normal project which poses a risk of exceeding the budget. The overruns can deem the project not viable especially where the margin is exceeded a great deal
  • You will need approvals from the local councils. These might be difficult to get especially in the urban areas. Restrictions and barriers can deem your project illegal
  • There is a risk of overcapitalizing. This is where you invest more money than the value your home gets translating to a kind of a loss especially when your granny flat is not for renting
  • It might not be a good addition when selling your home. Most of the home buyers are interested in having a single home under one roof. Claiming to offer an extra house that they don’t need for a higher price will force them to withdraw

Design and funding your build

The ideas about some secondary income and extra space works best for a granny flat project. However, it might be straightforward. Consider weighing your options and going several layers into research within your region to see if you are really making sense.

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