Are Granny Flats a Good Investment?

Granny flats wise investments. Their versatility gives them several benefits. They can house relatives, elderly parents or adult children. Granny flats can also be rented out for high financial returns, while increasing your property’s overall value.


A granny flat is an independent dwelling that occupies the same block of land as a house. Granny flats are often classified as ancillary or secondary dwellings, as they can not exist independently of the main home. While they must exist on the same block of land, granny flats can be detached or attached to the main dwelling. The owner of the land must ensure that granny flats have independent entrances and their own separate utility supplies. When building or renting out a granny flat, owners must abide by the requirements set out by their local council. 


The cost of building a granny flat depends on a number of factors including size, design, materials used and the block of land. Granny flats in Western Australia can cost as little as $100 000 to build and are the cheapest type of residential building. The overall cost of building a granny flat depends on construction expenses, council fees, and installation costs.

The size, design, materials used, and block of land all determine the final price of building a granny flat. The more bedrooms and bathrooms a granny flat has, the more it will cost. Likewise, higher-quality materials drive up building costs. The block of land will need to be prepared before building a granny flat. Removing obstacles like trees and rocks makes the process lengthier and more expensive. Working with certain soil types similarly affects preparation. Council costs include the price of lodging planning and building approvals. They may also include other fees. Installation costs refer to setting up independent utilities for the granny flat. Additional costs include furnishings and insulation.


You can build a granny flat on your property if you meet the criteria and attain the necessary approvals. The basic criterion for building a granny flat is that it is constructed on a block of land with a house on it. The three primary approvals necessary for building a granny flat are planning, building, and council approval. 

Planning approval is focused on ensuring your granny flat doesn’t have a negative impact on your neighbourhood. This encompasses both practical considerations and more aesthetic criteria. This often means excluding features from your granny flat if they risk creating disharmony on your street’s appearance.  

Building approval places a greater emphasis on the building process itself. By ensuring your granny flat follows the appropriate building codes, you avoid creating risks to health and safety. A qualified granny flat builder is aware of these codes and follows the necessary precautions for a safe build.

Council approvals are additional requirements that you must abide by when building a granny flat. While they vary by council, there are some common considerations that they entail. Typically, they address the minimum size requirements for the lot of land and the granny flat itself. 


Granny flats are capable of fulfilling a variety of purposes, depending on your needs. This is often dependent on their size and design. The extra space works well to provide housing or rental income. 

One excellent use for granny flats is  housing for family members. A granny flat allows young adults to have greater independence while still living at home. They also work well for elderly family members, giving them their own space but keeping them nearby. In recent years, they have become a popular alternative to nursing homes. And if they’re not being used as consistent residences, they can still act as useful guest houses when you have visitors over.

However, granny flats aren’t limited to being used as additional living space. Many people get some extra utility by repurposing their granny flats. Some potential uses for a granny flat include a hobby room, a gym or a personal theatre. Many people even use them to get work done and get the benefit of office pods. Granny flats are often used as rentals. This provides a source of passive income.

Check out some of Granny Flats WA’s ideas for granny flat uses.

bed with several throw pillows, a dark blanket with white circles on it, two night stands and two lamps


You can rent out your granny flat. It is a useful source of passive income. Granny flats provide a high rental yield due to their low upfront costs. Property prices are high, making granny flats appealing to renters looking to save. To rent out your granny flat, you must make a rental listing. You can do this on your own or through a property manager. It will have to include the specifications of the granny flat and the expectations for potential tenants. Granny flats are popular rentals for several demographics, including students, retirees and young couples. 


A granny flat will add value to your home as it increases the amount of living space on your block. A granny flat can also be rented out to provide income over time. This appeals to buyers because it can provide up to two rental streams as an investment property. Granny flats appreciate in value with time, like other properties. Houses with granny flats can have a higher resale value as a result. They’re a more convenient alternative to dual occupancies for these purposes.


You should invest in a granny flat if you’re looking for a low cost dwelling with a high financial return. Granny flats have a much lower upfront cost than full-sized houses, making them an affordable building option. They’re also incredibly versatile and capable of suiting your needs, whatever they may be. While you may be daunted by the building and approval process, there’s no need to fret. A reputable builder like Granny Flats WA will take responsibility and guide you through each step of the journey.

Chat with one of the Granny Flats WA team members to see if we have a granny flat that suits you. You can also view some of our designs here.