top granny flat builders

Expert Picks: Sydney’s Most Reliable Granny Flat Builders for Your Next Project

A granny flat is typically a self-contained dwelling on the same property as an existing home. It can be used by family members or as rental accommodation and is becoming increasingly popular in Sydney

Some common uses for these properties include elderly care, rental income, work from home space, spare room for kids to have some independence and more.  

In this post, we will introduce you to the Best Sydney Granny Flat Builders so you can make your decision about who to contact when it comes time to build your new project!

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    DB Homes

    db homes granny flats

    DB Homes, based in Sydney, Australia, is a leading builder specializing in granny flats, offering a range of customisable plans and designs. With over 35 years of experience, they are committed to providing quality, affordable solutions for adding value to existing properties through granny flat additions and extensions. 

    Their services are designed to cater to a variety of needs, with options for 1, 2, and 3 bedroom granny flats. DB Homes stands out for its commitment to customer satisfaction, traditional craftsmanship, and modern technology, ensuring each project is handled with the utmost care and professionalism.

    Key Services and Features of DB Homes:

    • Granny Flat Specialists: Offering a range of 1, 2, and 3 bedroom granny flat designs, fully customisable to meet individual needs.
    • Quality and Affordability: Focused on delivering high-quality granny flats at competitive prices.
    • Experienced Team: Over 35 years of experience in building superior family homes and granny flats.
    • Customisable Designs: A wide array of design options and plans to choose from, ensuring a perfect match for every property.
    • Sustainable Practices: Emphasizing energy-efficient and sustainable building practices.

    Phone: 1300 050 677
    Website: https://www.db-homes.com.au/

    Backyard Grannys

    backyard grannys

     

    Backyard Grannys, a leading granny flat builder based in Newcastle, Central Coast, and Hunter Valley, boasts over a decade of expertise in designing and constructing high-quality granny flats. With a portfolio of over 1000 successful projects, they have earned a reputation for top-notch design and construction. Specializing solely in granny flats, Backyard Grannys is passionate about creating affordable, high-quality living spaces that offer excellent investment returns and meet a wide range of client needs. 

    Their award-winning designs include studio, 1, 2, and 3 bedroom granny flats, as well as 2 storey and custom granny flats. Serving areas including Newcastle, Maitland, The Hunter, Central Coast, Lake Macquarie, Cessnock, Port Stephens, and Sydney Regions, their expert team is committed to delivering the highest level of service and quality workmanship.

    Key Services and Features of Backyard Grannys:

    • Specialized Granny Flat Designs: Offering a variety of designs including studio, 1, 2, and 3 bedroom options, as well as 2 storey and custom granny flats.
    • High-Quality Construction: Focused on building durable and aesthetically pleasing granny flats.
    • Wide Range of Designs: Catering to diverse needs with a broad selection of floor plans and design options.
    • Comprehensive Service Package: Including approval, design, construction, and project management.

    Phone: (02) 4947 2800
    Email: [email protected]
    Website: https://www.backyardgrannys.com.au/

    Bungalow Homes

    bungalow homes

    Bungalow Homes, operating in Sydney and the Northern Beaches, is renowned for its expertise in constructing high-quality granny flats. With over 35 years of combined experience in the building industry, they have specialized in granny flats since 2011, making them one of the pioneers in this niche market. 

    Their focus is on creating affordable, precision-crafted granny flats that cater to both families and investors. Bungalow Homes prides itself on its award-winning designs and construction, ensuring each project is tailored to the client's individual needs and lifestyle. Their approach combines traditional craftsmanship with modern building techniques, resulting in granny flats that are not only functional but also aesthetically pleasing.

    Key Services Offered by Bungalow Homes:

    • Custom Granny Flat Designs: Offering a range of designs including studio, 1, 2, and 3 bedroom options.
    • High-Quality Construction: Emphasizing durability and aesthetic appeal in every project.
    • Tailored Solutions: Focusing on individual client needs and preferences for each granny flat.
    • Experienced Team: Over 35 years of combined experience in high-end residential construction.

    Phone: (02) 9984 8950
    Email: [email protected]
    Website: https://bungalowgrannyflats.com.au/

    Aarons Outdoor

    aarons outdoor

    Aarons Outdoor, an Australian company, excels in enhancing outdoor living spaces with a range of high-quality products and services. They specialize in creating residential backyards and commercial spaces that are both functional and aesthetically pleasing. Their product lineup includes rooms, gazebos, play equipment, accessories, and more, catering to various outdoor needs. 

    Aarons Outdoor is also involved in special projects, charity work, and media partnerships, showcasing their commitment to community engagement and innovative outdoor solutions. They emphasize eco-friendly practices by using sustainable timber and sourcing materials locally, reducing the carbon footprint. Additionally, all their timber products are made in Australia, ensuring quality and supporting local businesses.

    Key Services and Products Offered by Aarons Outdoor:

    • Residential Backyard Solutions: Including rooms, gazebos, play equipment, and accessories.
    • Commercial Space Enhancements: Catering to childcare centers, pubs, clubs, and special projects.
    • Eco-Friendly and Australian Made: Commitment to sustainable practices and local manufacturing.
    • Custom Design Services: Offering design and installation services tailored to individual preferences.

    Website: https://www.aaronsoutdoor.com.au/

    Granny Flats For Less (GFFL)

    granny flats for less

    Granny Flats For Less, based in Australia, specializes in designing and building modern granny flats and high-quality custom home extensions. They are a proudly Australian, family-owned and operated business, committed to providing affordable and attractive solutions for additional living space. 

    Their services include a free site visit from experienced design professionals who work within clients' budgets to bring the most value to their projects. Granny Flats For Less offers a wide range of contemporary granny flat designs and custom home extensions, ensuring each project is tailored to meet the specific needs and preferences of their clients.

    Key Services and Products Offered by Granny Flats For Less:

    • Granny Flat Design and Construction: Offering a variety of modern designs for granny flats.
    • Custom Home Extensions: Tailoring extensions to add value and functionality to existing homes.
    • Free Site Visits and Consultations: Providing expert advice and design options to suit individual budgets and requirements.
    • Focus on Quality and Affordability: Committed to delivering high-quality projects at competitive prices.

    Phone: (02) 8605 8464
    Website: https://grannyflatsforless.com.au/

    Half-Priced Granny Flats Sydney

    half priced granny flats

    Half Priced Granny Flats, based in Sydney, specializes in building quality granny flats at affordable prices. They offer a range of granny flat designs, including one, two, and three-bedroom options, catering to various needs and preferences. With a focus on delivering high-quality construction at budget-friendly prices, Half Priced Granny Flats has become a leader in the granny flat market in areas like Parramatta, Blacktown, Penrith, Campbelltown, and across Sydney. 

    Their services include providing granny flat plans, designs, and construction, ensuring a seamless and efficient process for their clients. The company is known for its commitment to delivering quality granny flats without compromise, making them a popular choice for both tenants and landlords.

    Key Services and Products Offered by Half-Priced Granny Flats:

    • Granny Flat Designs: Offering a range of designs including one, two, and three-bedroom granny flats.
    • Quality Construction: Focused on delivering high-quality granny flats at affordable prices.
    • Customisable Options: Tailoring granny flats to meet individual client needs and preferences.
    • Wide Service Area: Serving areas across Sydney, including Parramatta, Blacktown, Penrith, and Campbelltown.

    Phone: 02 9822 9989
    Email: [email protected]
    Website: https://halfpricedgrannyflats.com.au/

    Master Granny Flats (MGF)

    master granny flats

     

    Master Granny Flats, a prominent builder in Sydney and Wollongong, specializes in custom-designed granny flats. With a focus on design, approval, and construction, they cater to a wide range of client needs, offering tailored solutions for granny flat projects. Their expertise in the field is evident in their commitment to delivering high-quality, functional, and aesthetically pleasing granny flats. Master Granny Flats stands out for their professional approach, ensuring each project is managed efficiently from start to finish. Their team of experts works closely with clients to bring their vision to life, reflecting a blend of modern design and practicality in every build.

    Key Services and Features of Master Granny Flats:

    • Custom Design Granny Flats: Specializing in creating granny flats that are tailored to individual client requirements.
    • Comprehensive Services: Covering all aspects of granny flat projects, from design and approval to construction.
    • Focus on Quality and Client Satisfaction: Committed to delivering projects that meet high standards of quality and client expectations.

    Phone: 1300 643 528
    Website: https://www.mastergrannyflats.com.au/

    Amescorp

    amescorp

    Amescorp, a prominent builder based in Sydney, NSW, Australia, specializes in custom-designed homes and granny flats. With a commitment to professionalism and efficiency, they offer a range of building services, including design, approval, and construction. Amescorp is recognized as one of the top 10 home builders in Sydney, showcasing their expertise in creating custom-designed homes with decades of experience. They also have a display granny flat in the Central Coast, demonstrating their proficiency in this area. The company's approach is client-focused, ensuring a seamless and stress-free building process.

    Key Services and Features of Amescorp:

    • Custom Home Building: Specializing in designing and constructing custom homes tailored to individual client needs.
    • Granny Flat Construction: Expertise in building high-quality granny flats, with a display model available for viewing on the Central Coast.
    • Comprehensive Building Services: Covering all aspects of the building process, from design and approval to construction.
    • Client-Centric Approach: Focused on providing a stress-free experience for clients, with a commitment to quality and satisfaction.

    Phone: (02) 8798 9858
    Email: [email protected]
    Website: https://amescorp.com.au/

    Butres Group

    butres group

    Butres Group, a local expert in custom home renovations and conversions based in Sydney, has over 20 years of experience in the industry. They pride themselves on their dedication to customer service, going above and beyond to ensure that completed projects exceed expectations while adhering to budget and time constraints.

     Butres Group specializes in a range of home improvement services, including skylight installation, kitchen renovations, and comprehensive home makeovers. They maintain a commitment to open communication with clients, ensuring that the end result is not only stylish and functional but also aligns perfectly with the client's vision.

    Key Services Offered by Butres Group:

    • Custom Home Renovations: Tailoring renovations to meet specific client needs and preferences.
    • Skylight Installation: Enhancing homes with natural light through professional skylight installations.
    • Kitchen Renovations: Offering complete kitchen makeover services, from design to execution.
    • Comprehensive Project Management: Ensuring projects are completed on time and within budget, with constant client communication.

    Phone: 0404 987 079
    Email: [email protected]
    Website: https://butresgroup.com.au/

    Croydon Constructions

    croydon constructions

    Croydon Constructions, located in Sydney, NSW, Australia, is a renowned builder specializing in custom home renovations and conversions. They offer a variety of services, including the construction of new homes, granny flats, renovations, floor additions, and extensions. With a focus on customer service and satisfaction, Croydon Constructions is dedicated to helping clients achieve their dream homes. They provide comprehensive services from the initial onboarding and project review to contract signing, construction, and aftercare. Their process ensures that clients' concepts are brought to life, adhering to budget constraints and project timelines.

    Key Services Offered by Croydon Constructions:

    • New Home Building: Constructing custom-designed new homes.
    • Renovations and Extensions: Specializing in home renovations and extensions.
    • Granny Flats: Building granny flats tailored to clients' needs.
    • Maintenance Services: Offering property maintenance services.
    • Project Management: Comprehensive project management from start to finish.

    Phone: 0414716310
    Email: [email protected]
    Website: http://www.croydonconstructions.com.au/

    Doumit Homes

    doumithomes

    Doumit Homes, a family-owned and operated business based in Sydney, NSW, specialises in custom home building, renovations, and granny flat construction. With a commitment to quality and customer satisfaction, they have been creating dream homes since 1995. Doumit Homes offers a range of services, including building new homes, duplexes, and granny flats, each tailored to meet the unique needs and preferences of their clients. Their approach to construction is client-focused, ensuring a smooth and enjoyable experience from the initial design phase to the final handover. The company prides itself on its easy process, clear time frames, turnkey solutions, superior building quality, and a trusted team of professionals.

    Key Services and Products Offered by Doumit Homes:

    • New Home Building: Constructing custom-designed new homes with high-quality craftsmanship.
    • Duplexes: Specialising in building duplexes for investors or extended families.
    • Granny Flats: Expertise in designing and constructing granny flats with guidance from council approval to workmanship.
    • Client-Centric Approach: Focused on delivering a stress-free building experience with detailed contracts and no hidden extras.
    • Superior Building Quality: Leveraging years of experience to deliver exceptional projects with a personal touch.

    Phone: 02 8812 3012
    Email: [email protected]
    Website: https://doumithomes.com.au/

    Modularwa

    modularwa

    Modular Homes WA is a distinguished builder in Western Australia, specializing in constructing modular and transportable homes. They are committed to building modern, affordable modular homes that are well-suited to the Western Australian landscape and lifestyle. Utilizing high-quality, environmentally friendly, and cost-effective materials, Modular Homes WA creates dream homes and housing projects with a focus on efficiency and convenience. Their kit homes are built off-site and delivered to the land, offering a faster and less hassle-filled path to homeownership. The company stands out for its ability to provide homes that combine the structural and aesthetic qualities of traditional on-site homes with the added benefits of durability, affordability, and quicker construction times.

    Key Services and Products Offered by Modular Homes WA:

    • Modular and Transportable Homes: Specializing in building modular homes that are durable, affordable, and have faster build times.
    • High-Quality Materials: Using environmentally friendly and cost-effective materials for construction.
    • Efficient Construction Process: Building homes off-site and delivering them to the land for quick and convenient setup.

    Phone: 08 6454 0919
    Email: [email protected]
    Website: https://modularwa.com.au/

    Tekton Building Group

    tektonbuildinggroup

    Tekton Building Group, based in Sydney, NSW, Australia, is a distinguished construction company specializing in custom home building and commercial properties. With over 10 years of experience in the Sydney area, they have established a reputation for delivering projects on time and within budget. Tekton Building Group offers a range of services, including custom new homes, commercial properties, renovations, extensions, consulting, design services, architectural planning, DA approval, solar passive design, café fit-outs, church halls, and tilt panel construction. Their commitment to careful planning, communication, and design ensures that each project brings clients' dreams to life.

    Key Services and Features of Tekton Building Group:

    • Custom New Homes and Commercial Properties: Specializing in building unique homes and commercial spaces.
    • Renovations and Extensions: Expertise in enhancing and expanding existing structures.
    • Comprehensive Design and Planning Services: Including architectural planning, DA approval, and solar passive design.
    • Specialized Construction: Offering café fit-outs, church halls, and tilt panel construction.

    Phone: 0422 605 380
    Email: [email protected]
    Website: https://www.tektonbuildinggroup.com.au/

    Granny Flat Builders

    granny flat builders sydney

    Granny Flat Builders Sydney is a leading construction company in Sydney, specializing in the design and construction of high-quality granny flats. With over 30 years of experience and a portfolio of over 500 completed projects, they have established themselves as experts in the field. The company offers a range of granny flat designs, including luxury finishes at affordable prices, and is known for its fast and hassle-free approval process. Their services cover everything from initial design concepts to construction and final handover, ensuring a seamless experience for clients. Granny Flat Builders Sydney prides itself on its exceptional craftsmanship, fast approvals, and commitment to delivering projects that exceed client expectations.

    Key Services and Features of Granny Flat Builders Sydney:

    • Specialization in Granny Flats: Offering a variety of granny flat designs with luxury finishes.
    • Fast and Hassle-Free Approvals: Streamlining the approval process for a quick start to construction.
    • Comprehensive Service: Handling all aspects of granny flat projects, from design to completion.
    • Quality Construction: Ensuring high standards of construction with premium materials.

    Phone: 1300 830 176
    Email: [email protected]
    Website: https://www.grannyflatbuilders-sydney.com.au/

    Granny Flat Approvals

    granny flat approvals

    Granny Flat Approvals Sydney is a leading construction company in Sydney, specializing in designing and managing the construction of granny flats. With over 15 years of experience, they have a reputation for creating award-winning granny flats throughout Sydney. The company offers a uniquely transparent building system, providing comprehensive and transparent turn-key build pricing, including site costs. They focus on flexibility in design, approval, and construction, offering packages to suit various needs. Their approach is to bypass the conventional 'Conveyor Belt' process, going straight to the source for design, approval, and construction, ensuring cost savings and efficiency for their clients.

    Key Services and Features of Granny Flat Approvals Sydney:

    • Transparent Turn-Key Build Prices: Including site costs, with no hidden fees.
    • Custom Design and Construction: Specializing in granny flats with a focus on quality and affordability.
    • Professional and Experienced Team: Over 15 years of experience in designing and managing the construction of granny flats.
    • Comprehensive Service: Covering everything from site appraisal, detailed survey, plan preparation, engineering, to affordable turn-key build packages.

    Phone: 1300 205 007
    Email: [email protected]
    Website: https://www.grannyflatapprovals.com.au/

    Granny Flats Australia

    granny flats australia

    Granny Flats Australia, operating since 2009, is a pioneer in the granny flat building industry in Australia. They are passionate about bringing clients' tailored ideas to life, offering flexible, transparent, and direct communication. The company specializes in constructing granny flats that are not just functional living spaces but also aesthetically pleasing mini-homes. Their approach to building granny flats involves a hassle-free process with seamless delivery, ensuring each project is handled with care and professionalism. Granny Flats Australia caters to various needs, whether it's building a dream home, a high-yielding investment property, or creating extra room for loved ones.

    Key Services and Features of Granny Flats Australia:

    • Custom Granny Flat Construction: Specializing in building granny flats tailored to clients' specific needs and preferences.
    • Luxury Inclusions and Customized Floor Plans: Offering high-quality construction with luxury inclusions and customizable floor plans.
    • Quality Assurance and Satisfaction: Committed to providing unbeatable quality assurance and achieving 100% customer satisfaction.
    • Wide Range of Designs: Over 50 floor plan designs to choose from or the option to customize your own.

    Phone: (02) 9899 9146
    Website: https://grannyflatsaustralia.com.au/

    Blue Gum Granny Flats & Homes

    blue gum

     

    Blue Gum Granny Flats & Homes, based in Sydney, specializes in constructing quality granny flats tailored to clients' specific requirements. With a commitment to professional granny flat construction, they focus on cutting-edge research and development in materials, products, quality control, processes, and construction advancements. Their services include a range of granny flat designs, with the option for customization to suit individual project needs. The company prides itself on its ability to deliver high-quality granny flats in Sydney, ensuring each project is handled with expertise and precision.

    Key Services and Features of Blue Gum Granny Flats & Homes:

    • Granny Flat Construction: Specializing in building granny flats with a variety of design options and customizations.
    • Professional Approach: Emphasizing research and development to ensure quality and innovation in construction.
    • Customizable Designs: Offering clients the flexibility to choose or customize designs according to their project requirements.
    • Quality Assurance: Focused on delivering high-quality granny flats with a commitment to excellence in construction.

    Phone: 1300 06 06 51
    Email: [email protected]
    Website: https://www.grannyflatsydney.com.au/

    Inhouse Granny Flats

    inhouse granny flat

    InHouse Granny Flats, with over 25 years of experience, stands as a leading provider of granny flats in Sydney. They offer a unique and comprehensive construction experience, focusing on creating intelligent investment choices for property investors and families. Their all-in-one solution for granny flats encompasses everything from property management and maintenance to renovations, new builds, and seminars. InHouse Granny Flats handles every aspect of the process in-house, ensuring seamless coordination and unrivalled quality in every project. They are committed to providing personalised service and flawless execution, allowing clients to enjoy increased rental income or expanded living space.

    Key Services and Features of InHouse Granny Flats:

    • Comprehensive Granny Flat Solutions: Specializing in granny flats with a focus on quality and affordability.
    • In-House Services: Offering a range of services including property management, maintenance, renovations, and new builds.
    • Custom Design Process: Providing a custom design process to create a granny flat layout that fits clients' land and needs.
    • Experienced Team: Over 25 years of experience in the construction industry.

    Phone: 02 9659 9009
    Email: [email protected]
    Website: https://www.inhousegrannyflat.com.au/

    Smart Choice

    smart choice granny flats

    Smart Choice Granny Flats, located in Pemulwuy, NSW, Australia, is a leading builder specialising in granny flats. They have been recognized for their high-quality construction and innovative designs, offering a range of granny flat options to suit various needs and preferences. With over 35 years of building experience, their team has built over 500 granny flats, perfecting their craft over the last 8 years. Smart Choice Granny Flats is known for their transparent pricing, fast design and approval process, and commitment to customer satisfaction. They provide a range of services, including custom design granny flats, steep sloping block solutions, granny flats with garages and large alfresco areas, double-storey granny flats, garage conversions, and triangular-shaped granny flats.

    Key Services and Features of Smart Choice Granny Flats:

    • Custom Design Granny Flats: Tailoring designs to suit unique property needs, including challenging block shapes and sizes.
    • Transparent Pricing: Offering itemised pricing on each selection, allowing for customisation according to budget.
    • Fast Design and Approval: Streamlining the design and approval process for quick project commencement.
    • Quality Construction: Ensuring high standards of workmanship and materials in every granny flat project.

    Phone: 1300176278
    Email: [email protected]
    Website: https://smartchoicegrannyflats.com.au/

    Premier Granny Flat

    premier granny flat builder

    Premier Granny Flats, located in Lugarno, NSW, Australia, is a prominent builder specializing in granny flats. They offer a comprehensive service that includes plans, prices, designs, and building premier granny flats. With a focus on quality workmanship and superior products, Premier Granny Flats provides a range of granny flat solutions, catering to various needs and preferences. Their services are available in Sydney and surrounding suburbs, including Penrith and Brookvale. The company prides itself on its ability to deliver high-quality granny flats, ensuring each project is completed to the highest standards.

    Key Services and Features of Premier Granny Flats:

    • Granny Flat Construction: Specializing in building granny flats with a variety of design options and customizations.
    • Transparent Pricing and Design: Offering itemized pricing on each selection and a range of design options to suit different needs.
    • Quality Assurance: Focused on delivering high-quality granny flats with a commitment to excellence in construction.
    • Wide Service Area: Serving Sydney and surrounding suburbs, including Penrith and Brookvale.

    Phone: 0423247807
    Website: https://premiergrannyflats.com.au/

    Designed for one or two persons, a granny flat is a self-contained living area usually located on the grounds of a single-family home. A granny flat can be detached, or it can be attached to the other dwelling. It is sometimes called a granny flat because it is a popular way for families to accommodate aging parents.

    The granny flat is most often known as an accessory apartment or accessory dwelling unit (ADU) in the building industry. Other terms include granny pod, mother-in-law unit, in-law apartment, bonus unit, casita, carriage unit and ohana unit (primarily in Hawaii).

    Many granny flats fall into the small house category, and the surge in interest in small house living has been a boon to grandparents interested in this type of housing. In addition, Granny flats/tiny houses may be used for nannies or young adult family members. They are sometimes used as rental units, but zoning laws and deed restrictions sometimes ban renting.

    As multigenerational housing becomes more accepted, granny flats are likely to become more prevalent. As a result, realtors and builders report that they are already a good selling point.

    The upsides of having a granny flat

    Building a granny flat is an affordable way to own an investment property. If you are not yet ready to buy a separate home as an investment, you can start with constructing a granny flat first.

    A granny flat could help you make extra money by renting it out. Depending on the location of your property, your granny flat could be able to generate several hundred dollars of rental income per week, which could help cover the costs of your mortgage.

    A granny flat is easier to maintain and look after than a separate investment property, given its proximity to your primary dwelling.

    A granny flat also boosts the value of your property, especially if it is legally compliant. You would be able to sell your property at a higher value if you have a well-maintained granny flat.

    The cons of owning a granny flat

    While there are several upsides to owning a granny flat, there are also some consequences that you need to consider.

    If you decide to rent it out to unrelated parties, be prepared to deal with tenants. You need to develop patience as you might encounter tenants with different personalities.

    It would be best if you also prepare your wallets for costs associated with the maintenance of the granny flat. Related expenses do not end with the construction of the granny flat — you should also think of the changes needed to maintain and keep the property in shape.

    Another factor you should look into is the capital gains tax that you might need to settle if you sell your property down the line. For example, if you use your granny flat for income, you would be required to pay capital gains tax.

    The cost of building a granny flat varies — it depends on the quality of the build you are gunning for, as well as the purpose of the flat. Constructing a granny flat could take as little as $20,000 to as much as $200,000.

    In choosing how to set up your granny flat, there are several options you can consider. There are prefabricated and modular homes that can be installed in your backyard, but you can also build a granny flat from scratch.

    When it comes to financing the construction of your granny flat, you also have a range of choices. You can either use the equity you built in your home or apply for another loan. However, it would help if you were prepared to have your home revalued.

    You can also ask your lender if they offer loans specifically catered to the construction of granny flats. Another alternative is to refinance your existing home loan with a new credit provider.

    Like any investment property, granny flat costs depend on your needs and what you want to build. However, many experts agree granny flats prices are, on average, around $100,000 for a one-bedder.

    Here are a few reasons why granny flats are a popular option for investors:

    The rental income could provide cash flow. Many people rent granny flats, from students and young singles looking for affordable housing to retirees wanting to downsize.

    Building a granny flat is usually cheaper than buying a standalone investment property. It's also unlikely to interrupt your everyday routine, like home extensions and renovations.

    Adding a granny flat to your house could increase your resale value. In addition, it gives the new owner the option to earn rental income and the benefit of an extra bedroom.

    How is a granny flat investment taxed?

    Like any other investment property, tax is payable on the rental income you earn from your granny flat. The Capital Gains Tax liability also applies. On the flip side, granny flat tax exemptions might be available.

    If you're wondering, can you negatively gear a granny flat? Unfortunately, the answer could be yes! If the cost of your granny flat is more than your income, you could claim the loan interest and ongoing expenses (like maintenance and insurance) as tax deductions. But if your granny flat is positively geared (as in, the rental income is more than your expenses), you can only claim the ongoing costs. You might also be able to claim value depreciation, but always remember to seek professional advice.

    What makes a granny flat a great rental property

    When you decide to have your granny flat rented out to tenants, you must take note of the following:

    • Consider the safety and privacy of your tenant. The granny flat must have a separate entrance and pathways from the street to give your tenants access to the dwelling.
    • Make sure that your principal residence is located in a desirable suburb. Location is still king when it comes to granny flats — the more accessible your property is to places of interest like shopping malls, hospitals, and offices, the more profitable it will be.
    • Design your granny flat as you would your residence. Make sure that your granny flat is something you would be comfortable living in. Leave room for tenants to put their personal touches, like having the granny flat painted neutral colours.

    A granny flat should be designed to suit both your style and your budget. After all, it is a smaller version of your main home and needs to fit in and flow well with your primary dwelling.

    However, at the same time, you do need to stick to certain regulations here:

    Queensland – 80 square metres

    Although, in Brisbane, you can build a granny flat a maximum of 70 square metres but with no more than two bedrooms. So, you can try speaking directly with your local Council to find out your exact restrictions, as they do change between Councils'. See detailed QLD rules.

    Victoria – 60 square metres

    They are called a "Dependant Persons Unit" (DPU), so they must be movable. Similarly to Queensland, the regulations vary in size depending on your Council. See detailed VIC rules.

    New South Wales – From 60 square metres – 100 square metres. 

    The former is a Complying Development, and the latter must be approved by submitting a Development Application. See Detailed NSW rules.

    South Australia – 60 square metres 

    OR 70% of the total floor area of the primary dwelling (whichever is less). See detailed SA rules.

    Tasmania – 60 square metres 

    OR 30% of the total area of the main home (the lesser). See detailed TAS rules.

    Western Australia – From 70 square metres – 100 square metres depending on your local Council. Rural areas are more likely to be flexible. See detailed WA rules.

    Northern Territory 

    Metropolitan areas, such as the city of Darwin, have more strict limits, with the floor space limited to 50 square metres. But, again, rural regions are possibly more lenient. For example, your local Council may allow up to 80 square metres.

    Australian Capital Territory – 90 square metres. 

    It is worth mentioning that the ACT also has a minimum size limit for granny flats of 40 square metres. See detailed ACT rules.

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