Rent Return on Granny Flats

One opportunity that’s caught the eye of homeowners and investors alike is the concept of building a new house and granny flat with plans to rent out the granny flat. These compact, self-contained living spaces are not just an addition to your property. They’re also a brilliant investment opportunity.

If you’re forward-thinking and keen to make the most of your property, you’re in the right place. Better Built Homes’ sales and marketing manager, Paul Spicer, has helped to shape this blog. Drawing upon his 10 years of experience in the home building industry, Paul possesses a wealth of insights into granny flats that most other blogs won’t provide. In this post, we’ll explore all aspects of granny flats, highlighting their potential for profitable returns. We’ll focus on income, growth, and equity, the key factors that make them incredibly attractive. 

So, let’s discuss why granny flats are a savvy choice for homeowners who value financial security and the luxury of a little extra space.

Why Build a Granny Flat?

Historically, the desire to construct granny flats was primarily to support loved ones. However, in the face of rising living costs and amid the growing housing challenges, particularly in urban areas, the appeal of sharing land with separate abodes extends to both homeowners and renters, presenting mutual advantages. Here are three compelling reasons to consider the prospect of building and renting out a granny flat:


Picture this. A separate, self-contained living space right in your backyard, serving as a rental unit. That’s the essence of a granny flat, and it’s a compelling reason you should consider building one. In today’s world, financial responsibility is paramount, and finding additional sources of income is a game-changer.

In Australia, renting out a granny flat is gaining traction, and the opportunity and appeal is clear, with 17.6% of all Sydney metro properties having the potential to house a granny flat. Tenants get privacy, comfort, and a suburban lifestyle, all within the confines of your property, while you enjoy a steady flow of rental income.

However, this extra income isn’t just about topping up your bank account. It’s about securing a brighter future for you and your loved ones. The additional revenue can bolster your savings and retirement plans or even be invested in other ways. 


Does a granny flat add value to a property? The answer is an unequivocal yes. This backyard addition transforms your property into a versatile asset, attracting a wider range of potential buyers in the future. And the potential for growth doesn’t stop there. In New South Wales, if your property is larger than 450m², you can construct a “secondary dwelling,” commonly known as a granny flat. These dwellings can encompass a maximum of 60m², configurable into one or two bedrooms, catering to the needs of different tenants, be it singles, couples, or small families.

The real estate market in Australia has displayed consistent growth over the years, and granny flats are well-poised to leverage this trend. The extra living space can be a significant selling point when the time comes to put your Sydney property on the market. It’s clear the addition of a granny flat will enhance the overall appeal of your home.


With the addition of a granny flat, you enjoy the immediate financial benefits of rental income and build equity over time, effectively boosting your overall net worth. Equity allows you to explore other investment opportunities or even enhance your lifestyle. It’s a powerful tool for securing your financial future and achieving your long-term goals.

The Better Built Homes Advantage

We grasp the distinctive opportunities and challenges of building and renting out a granny flat. We take pride in crafting spaces that effortlessly integrate with your existing property, enhancing comfort and convenience for your tenants. Our expertly designed homes and layouts are a testament to our commitment to safeguarding your property’s value, its appeal, and, equally important, its rental income.

At Better Built Homes, we also embrace that multigenerational living arrangements have become an integral part of our culture in Australia. And granny flats allow extended families to live together while retaining their independence. It’s all about creating a harmonious environment catering to every family member’s diverse needs and preferences. 

Whether you rent out a granny flat or share it with your family, we’re committed to helping you establish a lasting legacy, and granny flats play a pivotal role in that vision.

Our 8-Stage Granny-Flat Building Process

Our expertise and experience ensure every granny flat building process is simple, efficient, and rewarding. Here’s a straightforward roadmap to granny flat ownership:

Stage 1: Land & Design

Select one of our home designs and a granny flat design that fits your land, lifestyle, and needs. Once you pay the Tender Request fee, we’ll conduct a site inspection and begin the preliminary planning.

Stage 2: The Tender Deal

We’ll craft a detailed tender based on your input. One of our new home sales consultants will explain it all, and once you’ve accepted the tender and paid the fee, we’ll get started on your presentation plans.

Stage 3: Plan & Style

This phase is all about bringing your granny flat plans to life. You’ll choose bricks and external colours and view your plans. Once you’re satisfied, you pay the submission fee, and we’ll lock in the details.

Stage 4: Final Touches

Our drafting team meticulously finalises your plans, adding any last-minute tweaks and external colour selections. Then, our contractors can tick off the assessments to ensure everything meets standards.

Stage 5: Inside Out

Next, it’s time to select carpets, tiles, and electrical choices. You’ll also meet with our colour consultant to finalise your granny flat’s kitchen colours, wall hues, and bathroom fittings.

Stage 6: The Green Light

Building approvals can vary depending on local authorities. Once cleared, we’ll order consultant reports and secure a construction certificate.

Stage 7: Contracting 

Now that all the documents and variations are in place, the HIA building contract is prepared and sent for your approval. You’ll need to send a copy to the bank and show proof of funds for construction.

Stage 8: On-Site Kick-off

In the final stage, we perform a quality check. Everything is reviewed, and materials are ordered, checked, and approved by management. Supervisors are assigned to your project, and all construction stages are scheduled up to the first walkthrough, making the process as smooth as possible, from the initial consultation to the keys being handed over.

Your Financial Future with a Better Built Granny Flat

Owning a property with a granny flat opens doors to additional income, potential property value growth, and the steady accrual of equity. It’s an investment that has the potential to shape your financial future, providing both security and flexibility.

At Better Built Homes, you’re in the hands of experts. We’re dedicated to simplifying complex concepts and making your home-building journey as straightforward as possible. Our experienced team is committed to providing you with a home that meets your family’s needs and elevates your lifestyle. 

If you’ve ever contemplated constructing a granny flat, now is the opportune moment to get in touch with us. Let’s build your granny flat dreams, one step at a time.

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