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Are Granny Flats Worth It? [Ultimate Pros and Cons List]

You don’t need a granny to get value and use out of a granny flat. But are you aware of all the true benefits, and detractors, for adding one to your property?

Granny flats have served their historical purpose under a variety of names for centuries. A separate structure on a property to house family or guests, granny flats have been a convenient way to keep loved ones close. But not too close.

In more recent years, granny flats have boomed in popularity, not necessarily tied to the number of grannies in need of homes. Rather, savvy homeowners have found new ways to maximise their property value while also housing the occasional relative as needed.

Let’s be honest, Sydney’s real estate market is in a league of its own, and the demand for living space means there are plenty of profitable opportunities for granny flat owners.

Convenience and value aside, granny flats are an investment that needs ample consideration before jumping in with both feet. A highly positive option, there are some aspects to watch for as you plan a dream second home in your backyard. To help you make the right choice for you, your family, and your property, we’re breaking down if granny flats are worth it for today’s Australian homeowner.

A quick granny flat recap

Granny flats are a (usually) free-standing structure that adds livable space to an already inhabited property. You can think of them as mini homes or apartments minus the apartment building (and the pesky neighbours you share a wall with).

While some granny flats are prefabricated or modular, many are customisable or constructed onsite to specifications. This gives property owners quite a lot of room for creativity and inclusion of the features most important to how they expect to use the space. At a minimum, most include the essentials for a home: bedroom, bathroom, kitchen, living space, and a bit of storage.

But this makes granny flats sound much more basic than they are. These are not tiny homes. They’re spaces with full-size appliances, amenities, access to utilities, quality finishes, and space for furnishings. Addons like porches and decking can extend living space outdoors. They’re homes. Just in the backyard of another home.

Can any property have a granny flat?


This all comes down to the size of your property. You can’t add a flat to a commercial property (at least not a granny flat), so you’ll need to be zoned as a residential block. There’s also a minimum requirement in NSW that the lot be at least 450 square metres and have 12 metres of road frontage, which is probably enough for your home and a granny flat to fit comfortably.

From there, it’s up to you and a professional builder to design a flat that fits. Options come in all shapes and sizes, some up to a spacious three bedrooms (and a max size of 60m2). You won’t want anything smaller than the minimum 40m2 footprint but will likely find it more than spacious with a bedroom, kitchen, bath, and living space.

The (many) benefits of adding a granny flat to your property

Pro #1: Council approval

In nearly all cases, granny flats do not require council approvals as long as they meet the basic requirements and definition of a granny flat. This affords many property owners the flexibility to add detached living spaces at surprisingly affordable costs. A standard 45 m2 flat will cost $105,000 but can also help pay for itself in property value and/or rent.

Consider the alternative of adding on to your existing home. Creating an extension is another option for added living space. But it also requires a trove of permits and approvals, not to mention the disruption of your home and more limited use. You may be fine with granny down the hall, but you probably won’t want to rent that bedroom out to a stranger.

Pro #2: Rental ability

Speaking of rental ability, this is actually one of the top reasons people add granny flats to their property. The extra space, available on demand if the need for a family member arises, can also be let out. And the market is ripe for these spaces, especially in Sydney where downtown rentals can be near unaffordable. Students, tourists, and even visitors from other states may find it more convenient to rent a granny flat for a week than pay for a hotel or dorm (and your space is most likely nicer, too).

Pro #3: Privacy with guests

Family traveling in from the other side of Australia? Actually have a granny that wants to age in place? Granny flats can help you keep family close without being, well, too close. They afford a great deal of privacy with separate everything, including entrances. Loved ones who need extra care or attention remain accessible.

People can come and go as needed while never being too far away if they need something or want to get together. Visitors may even be able to stay longer by avoiding pricey hotel fees (assuming you aren’t charging them, of course).

Pro #4: Accessibility

For the elderly, those with disabilities, or others with accessibility needs, granny flats are an excellent option. They can be customised to be compliant with nearly any accessibility option. What’s more, most floorplans, even those with multiple bedrooms, are one-storey dwellings. Talk with your builder about any special accommodations you want included, from ramps and railings to accessible showers.

Pro #5: Speed

Whatever your reason for wanting extra living space, granny flats are among the fastest additions available. Many can be built in just 14 weeks or less. By comparison, building a new home with the space you need for extended family can take a year or more (and costs a LOT more, too). Likewise, building an extension on your home can take at least 6 months. And remember those council approvals? They’ll doubtless delay things.

Pro #6: Cost

As mentioned above, granny flats are a much more cost-effective way to add living space (with privacy!) to your property. In Sydney, you can pay between $2,000 - $4,000 per square metre for a new home build. For an average 185m2 home, that’s $370,000 - $740,000. Choose a granny flat instead, and you can pay closer to $105,000 for a one-story free-standing structure that meets your needs and gives your family members (or renters) much more privacy.

Pro #7: Customisation

Not all granny flats are cubes with four rooms dropped in a backyard. You can actually work with a dedicated builder of granny flats and choose from a variety of floorplans. Many will even let you make changes before one stud is set in place. Choose from one-, two-, and three-bedroom options as well as a variety of finishes. Granite counters? Sure! Decking surround with a partial awning? Sounds great! Your family, renters, and you are bound to love it.

Curious about your design options? Click here for the BEST granny flat designs in Sydney

A few downsides to watch for with your granny flat dream

Con #1: Rental amenities

Depending on your location and how you plan to entice renters to your secondary abode, you might have a lot of competition. For one, granny flats are popping up all over Sydney. For another, you’re competing with other facilities like hotels or inns that, while they probably charge a lot more, may have a lot more to offer like gyms, pools, and room service. All of this could make it a little harder to attract tenants to start, and you should never rely on rental income to be able to afford your granny flat.

Con #2: Permanent

Granny flats are permanent structures with foundations, utility access, and specified setbacks from your property line. Once you have a granny flat in place, it’s there to stay. That could make it trickier to add a pool or update your garden down the line. You also won’t be able to subdivide your property once you have a granny flat in place.

Con #3: Operational Costs

Maintaining another building, no matter how small on your property, will have its own costs. Utilities and access to cable or internet will probably be needed. So will regular cleaning (through yourself or the expense of a service) unless you leave that to your tenant or family member. They’ll also have their own HVAC systems, water heaters, and utilities that require regular maintenance. While you might be able to time it with the work done on your main house, these visits will add on to the price.

Bellcast Granny Flats: For granny flats that are worth it (and then some)

Granny flats are a clear investment in your property and future, provided that you properly plan for the finances of it. Just be sure to get clear on exactly what you need or expect out of the addition before you start a project. Choosing a contractor that’s savvy about granny flats and how to maximise use of space is also a must have. You’ll find that a granny flat is worth it so much that you might move in yourself and rent your main house!

At Bellcast, all we focus on are granny flats and building the right flat for every customer’s needs. This comes down to more than just floor plan designs (which we have a lot of). We work to customise interior and exterior details so you’ll have a flat that functions the way you need it to.

Bellcast Granny Flats builds every home to last and backs each structure with a 25-year guarantee from roof to foundation. We also have the fastest build times in Sydney when it comes to granny flats, so you won’t be waiting long on moving family closer or generating rental income. Call us on 1300 661 370 to learn more!

Are Granny Flats Worth It? [Ultimate Pros and Cons List]

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