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Dos and don’ts of a granny flat

23rd Jul '18 • By Kaylyn Jeffrey

This trend of the addition of a granny flat has blown up recently in Australia resulting in miniature-looking houses on properties to complement the main residential home.

granny flat

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A granny flat is a self-contained unit located on the same premises as a family home. The term ‘granny flat’ can be attributed by the unit’s original most common use, which was to house an elderly relative of the family. Tiny homes like the granny flats are trending at the moment worldwide. 

DO decide on a detached or attached granny flat


Granny flats can be used for several purposes including home offices, housing elderly relatives, hobby space, guest housing, and extra rental income. It is wise to reach out to a specialist construction company with previous experience in granny flat construction as they can help you discover if your property is suitable and construct it to accommodate its purpose. 

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DO check regulations and gain perspective from a professional


Granny flats can be built on most residential properties but you should reach out to your local council to make sure there aren’t any restrictions. Purchase a planning certificate from the local council before conducting construction on your property. This typically takes 6-8 weeks. 

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DO plan extensively and choose a design


Granny flats must have clear, separate pedestrian access and must not take up more than 60 percent of the property or else it doesn’t qualify. Work with your construction specialist to create a design that will suit whatever purpose your granny flat will be constructed to accommodate. 

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DON'T bite off more than you can chew financially 


Before you begin the process, you will need to have the existing property valued. It is common to use the equity available on the property and add an amount onto the current mortgage. Speak with a lender prior to deciding to finance your new granny flat. Speaking to a real estate agent is also a wise decision to ensure how much value exactly it would actually add to the property. 

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DON'T get only one opinion or rush it 


Opinions should be gathered from the local council to address permissions to conduct construction, real estate agents to evaluate property worth, lenders to discuss the financial implications, and specialist construction companies to gather quotes. Gathering several opinions from several different qualified professionals in each area of interest will yield the best results to eliminate headache, surprises and financial strain.

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DON'T expect it to be easy breezy


Do not expect the world of being a landlord to be a breeze should you decide to rent the unit out for extra rental income. Renting out the unit will result in increased property management costs and will make you responsible for any tenant issues.

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The benefits 


Granny flats are relatively inexpensive to create and increase the rental yield to nearly 10 percent. This amount could help in paying off the mortgage or re-paying the cost of building the flat. Another benefit is that more tax depreciation is available to you. If you construct the granny flat brand new, you will have a lot to claim as well if you are renting out, you will have extra claimables on your depreciation schedule. These flats are easily rented out as they are very attractive to potential renters and act as awesome affordable accommodation. 

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Granny flats can increase the value of a property, help you pay off your mortgage faster, and provide you a decent return on investment. It’s no surprise that the construction of these flats are becoming more and more popular. As long as you take steps to mitigate risk and be financially inquisitive, the extra income the flats provide has the potential to be incredibly beneficial. 

About the Author


Kaylyn Jeffrey is the Web Content Manager for, a trades and services platform that connects everyday homeowners to local service professionals. When Kay isn't writing articles with ♥ from the coast of Australia, she is waking up to a view of the rainforest, travelling to and from Canada with her fiancé, and researching healthy, eco friendly and sustainable homeowner tips. 

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