Can You Rent Out A Granny Flat? 

Renting out a granny flat is easy if you get the necessary approvals, put up a rental listing and find the right tenants. It’s a great way to make some additional income, but you need to make sure you tick all the legal boxes and do things right. Here at Granny Flats WA, we have a wealth of experience in how to turn a granny flat into a financial asset.


This is rather obvious, but if you don’t have a granny flat, your first step is going to be to build one. This is quite an undertaking in itself, and you can learn about how to get started in our granny flat first steps blog. While building can be a challenging process, Granny Flats WA takes care of every step, including all paperwork and building approvals. This makes the whole experience as simple as it can be. And with an ongoing shortage of housing, it’s getting even easier to build a granny flat. A change to the law in January 2024 scrapped the minimum lot size in addition to some other requirements, to encourage the building of more granny flats.

If you already have a granny flat, your next step is to make sure you’re aware of the legal regulations you must adhere to if you want to rent it out. The primary prerequisites that your granny flat must abide by relate to its size (it cannot exceed 70m2 in most cases) and sufficient setback limitations. And since it will be a residence, it will require its own set of separate utilities from the main property. If your granny flat doesn’t currently fit into the necessary parameters, then you might need to put some money and effort into renovating it, so that it does.


Once you’re sure that everything is organised and you have gained the necessary approvals to rent out your granny flat, then you can begin looking for tenants. The process is similar to how it would be with most other rentals. However, it’s important to remember that you and your tenants will be living in close quarters, so take the time to select them properly. You can go through a property manager or rental company or do it yourself. If you are doing it yourself, you will need to research rental prices for properties with similar characteristics to yours and the general rental prices in your area. This will give you a fair comparison for the price you should be charging. You should then list everything you expect from a renter, including rental price, whether pets are allowed when the property becomes available and so on.

You will also need to think of an engaging description on the listing to attract the type of tenant that you want. This is where you can detail what kind of tenant would be well-suited to the property, as well as the benefits to the rental beyond the actual living space. These benefits could be proximity to things like cafes, shops and parks or good public transport options in the area. Your listing will need pictures of the rental so use good lighting and a high-quality camera to make the pictures look attractive and clearly show the details of the property. Make sure to clarify whether the granny flat is attached or detached in your listing.

Alternatively, you may choose to rent out your granny flat short-term as an Airbnb.


While there are no restrictions around who is allowed to rent a granny flat, there are generally certain groups that tend to gravitate to them more often. Granny flats are small, affordable spaces, so renters are often couples or people who live alone and are not looking to live very lavishly. Students frequently rent granny flats as a more affordable housing alternative to the other student housing available to them. Retirees may also rent granny flats if they are trying to downsize and don’t want to go to a nursing home. Couples may rent a granny flat if they are looking to save by paying less rent than at a house. Given Australia’s current housing crisis, granny flats are only growing in popularity as an affordable renting option.


When considering what type of person you might like as a tenant, it is also worth thinking about whether you are looking for a short-term or long-term tenant. You might decide that if the tenant is going to live in close proximity to you, you would rather select a person who you could see fitting into the space long-term. Alternatively, you might prefer to make the property available for short-term lets, to allow yourself a break in between tenants. This might be suitable for renovators who are waiting for their own properties to be finished, or exchange students or friends and colleagues with family visiting from interstate or overseas. As another option, you may choose to rent out your granny flat short-term as an Airbnb.


To ensure that you have a reliable tenant who will pay rent on time and take good care of your property, you will need to do a number of background checks. These involve a rental history check to see if they have been a good tenant in the past, a criminal background to find out if they are potentially dangerous or unreliable, and proof of income to ensure that they will be able to pay rent consistently. Additionally, there are a number of forms and agreements that need to be signed and completed to protect both tenants and landlords. It might also be worth taking out landlord insurance. While it’s not mandatory, it could reduce your risk, should a tenant go awry. 

Another thing to consider is that a granny flat rental situation is a bit different than a typical rental situation. There will likely be some element of cohabitation, so it’s worth taking that into account and having a clear idea of how that will work so that you can clearly lay that out to whoever is renting. This may also factor into how you decide on a tenant.


If you’re not planning to sell your property soon, then renting out your granny flat is a great idea. The rental market is extremely stretched right now. There are also a number of people building, who might be looking for a short-term let while they wait for their renovation to finish. If you choose your tenant wisely, a granny flat can be an excellent way to earn a decent, long-term income. If you don’t have a granny flat, it might be worth building one if you have a suitable property. That’s where we can help you. Contact us today to see if Granny Flats WA could help create your perfect custom-designed granny flat.