What is a Granny Flat?

First, let’s define what we mean by a “granny flat”. A granny flat is a self-contained living area located on the same land as a single-family home. It has its own entrance, bathroom, kitchen, living space, and sleeping area, but it is secondary to the main house. In Australia, granny flats are limited to 60 square metres (about 645 square feet), but those 60 “living area” square metres can feel more spacious with a clever design, including decks and patios. Granny flats get their name from their common use case—housing ageing parents or “grannies.” But today, granny flats serve a variety of purposes beyond a home for grandma. Adult children looking to save money, guests needing an extended stay, or even short-term renters are all potential occupants of modern granny flats. Looking for a granny flat in Mornington Peninsula, Yarra Valley, or Windsor? Superior Granny Flats specialises in designing and building custom granny flats that complement the unique charm of these areas.

Pros and Cons of Living in a Granny Flat: A Comprehensive Guide for Australians

Superior Granny Flats Team

February 28, 2025

As housing affordability continues to be a pressing issue in Australia, many homeowners and renters are turning to alternative living arrangements. One such option that has gained significant popularity in recent years is the granny flat.

These compact, self-contained living spaces have become a versatile solution for various housing needs, from accommodating elderly relatives to providing rental income opportunities.

In this blog, we'll explore the pros and cons of living in a granny flat, helping you decide if this unique housing option is right for you.

Pros of Living in a Granny Flat

1. Cost-Effective Living

One of the most appealing aspects of granny flats is their affordability compared to buying or renting a house on a separate property. Data from Flatmates.com.au shows the median rent for a two bedroom granny flat in Sydney is $500 per week, significantly less than the $730 median for a two bedroom apartment.

Building a granny flat is also typically cheaper than constructing a standard home since they are smaller and don't require purchasing land. This makes granny flats an attractive option for first-time buyers, downsizers, or those looking to house family members.

2. Proximity to Family

Granny flats offer a unique opportunity for intergenerational living. For many people, especially older individuals or young families, living close to relatives is a major selling point of granny flats.

Grandparents can spend more time with grandkids while still maintaining their own private space. Adult children living in a granny flat can assist their ageing parents when needed. This arrangement fosters closer family bonds and an intergenerational support system.

3 Increased Independence and Privacy

Although located on the same lot as the main house, a well-designed granny flat allows occupants to live independently with their own entrance, bathroom, kitchen, and living area. You can come and go freely without disturbing the main household.

A granny flat also affords more privacy than simply residing in a spare bedroom, as you're not directly sharing living spaces. This makes them well-suited for boomerang kids, elderly parents, or long-term guests.

If you're searching for granny flats for sale in Brisbane, Gold Coast, or Melbourne, this guide will help you weigh the pros and cons before investing

4. Rental Income Potential

For property owners, building a granny flat can be a smart investment. With the rising demand for affordable housing, particularly in major cities, granny flats can generate significant rental income. In fact, some investors have reported rental yields of up to 15% on their granny flat investments. This additional income stream can help offset mortgage payments or provide extra financial security.

You Might Also Like: How to Maximise Property Investment with Granny Flats

5. Flexibility and Versatility

Granny flats are incredibly versatile spaces. They can serve as guest accommodation, home offices, art studios, or even short-term rentals through platforms like Airbnb. This flexibility allows homeowners to adapt the space to their changing needs over time, making it a valuable long-term investment.

6. Increased Property Value

A high-quality granny flat can potentially boost your property's resale value. Buyers may appreciate the flexibility of a self-contained unit and be willing to pay more for a house with a granny flat.

Of course, the value added depends on factors like the flat's condition, size, fittings, and integration with the main residence. Building a granny flat doesn't always make financial sense, so carefully weigh the construction costs against the expected value increase.

Also Read: Are Granny Flats a Good Investment? Factors to Consider

Dreaming of extra space for family, a rental income stream, or a stylish backyard retreat? Superior Granny Flats are your trusted local experts for high-quality, custom-designed granny flats across Victoria and Queensland. Whether you're on the lookout for granny flats in Mornington Peninsula, Bendigo, Gippsland, or beyond, we make the process simple, from concept to completion.

Cons of Living in a Granny Flat

1. Limited Space

By nature, granny flats are compact, usually capped at 60 square metres. While this is ample space for one or two people, it can feel cramped compared to a full-sized house. Minimal storage is another common complaint amongst granny flat dwellers.

Bulky possessions like heirloom furniture may need to be sold or stored elsewhere. Stuff accumulates quickly in a small space, so you'll have to be proactive about decluttering. Consider whether you're truly ready to downsize before moving into a granny flat.

2. Potential for Privacy Issues

Residing on the same property as your relatives comes with inherent risks. Disagreements over things like parking, pets, noise, gardening and grandkids can sour the arrangement. Personality clashes and unresolved family dynamics may be amplified by the close proximity.

Privacy can also be limited, even with a detached granny flat. There's no escaping a nosy mother-in-law or a visiting family member if your spaces are mere metres apart. Establish clear boundaries and communication protocols before moving in to sidestep strife down the road.

Establishing clear boundaries and expectations from the outset is essential for maintaining harmonious relationships and respecting each other's independence.

3. Regulatory Challenges

Although regulations have become more relaxed in recent years, building and living in a granny flat still comes with certain restrictions. These can vary significantly between states and local councils, potentially limiting design options or rental possibilities.

It's imperative to thoroughly research local regulations before committing to a granny flat project. Also, make sure to work with a reputable builder who is well-versed in the rules to avoid any compliance headaches.

4. Resale Considerations

Granny flats are a somewhat niche offering that won't appeal to all future buyers. Some may see a secondary dwelling as a downside if they don't need the extra space and would prefer a bigger backyard, particularly if they're not interested in rental income or multi-generational living arrangements.

When it comes time to sell your property, you may have a more limited pool of interested house hunters. Keep this in mind if you plan to eventually move and weigh it against the granny flat's benefits while you live there.

Did you know that at Superior Granny Flats, we design, build, deliver and assemble quality kit homes at affordable prices straight to your property? Contact us today to discuss your vision and let us help you find the perfect granny flat solution for your property!

5. Reduced amenities and facilities

With their petite size, granny flats often can't accommodate features like bathtubs, laundry facilities, or extensive kitchens. You may need to use the main home's washer and dryer or visit the local laundromat. Cooking complicated meals could be a challenge without a full-sized stove and oven.

Reduced living space means you probably won't have room for a home office, art studio, or workout equipment. Be prepared to tailor your lifestyle and make some sacrifices to fit the available square footage.

Are you in need of a one-bedroom or two bedroom granny flat and relocatable home service? At Superior Granny Flats, our skilled team is committed to providing our customers Australia-wide with a long-lasting and exceptional level of professional accommodation options. Drawing on over 26 years of unique and expert experience, we have helped countless customers from both major cities and country towns benefit from our well-constructed and custom products.

Making the Most of Granny Flat Living

If you're considering living in a granny flat, here are some tips to maximise the benefits and minimise the drawbacks:

Optimise space: Invest in multi-functional furniture and clever storage solutions to make the most of the limited square footage.
Establish clear boundaries: If living near family, set ground rules for interaction and privacy to maintain a healthy balance.
Stay informed about regulations: Keep up-to-date with local council regulations regarding granny flats to ensure compliance and avoid potential issues.
Consider the long-term: Think about how your needs might change over time and design the granny flat with flexibility in mind.
Embrace outdoor living: Make use of any outdoor space to extend your living area and create a sense of openness.

Is Granny Flat Living Right for You?

There's no one-size-fits-all answer to whether a granny flat is a smart living arrangement for you. It depends on your unique needs, budget, family dynamics, and long-term goals. Hopefully, the points we've covered have given you a balanced look at the potential pluses and pitfalls.

If you decide a granny flat is right for you, partner with a trusted builder to ensure a quality result. At Superior Granny Flats, we have over 25 years of experience crafting stunning granny flats across Australia. Our team can help bring your dream dwelling to life, guiding you through every stage from council approval to handover.

Don't let the complexities of granny flat construction deter you from exploring this exciting housing option. Contact us today to discuss your vision and learn how we can turn it into reality.

Whether you're looking to downsize, generate rental income, or create a space for multi-generational living, we're here to help you make the most of granny flat living.

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