Do Granny Flats Add Value to Your Property?

If you’re asking yourself, ‘do granny flats add value to my property’ the answer is a resounding yes. Here’s why they work, and how to use these unique dwellings to make the biggest impact on your overall financial position.

For most Australians, our family homes are our biggest assets. In fact, at the end of the March 2021 quarter residential real estate counted for over 53% (that’s a huge $8,293.20 trillion) of all household wealth (breaking $8 trillion for the first time ever).

With that amount of money on the line, it just makes sense that we’d want to find ways to both protect, and grow, the value of our biggest assets. And one fantastic way to do that is to add a granny flat to your property.

Of course, when you ask the question, ‘do granny flats add value to my property’, you have to look at both the property’s resale value and at the monetary advantages you might be able to gain beyond that number. And there are many of those advantages. Let’s take a look.

Do Granny Flats Add Value to My Property?
Yes they do. Here’s how.

The Keppel 1 Bedroom Granny Flat with Deck and shade sail

Granny Flats Carry Their Own Monetary Value

Granny flats come in all shapes and sizes, and are created for all kinds of uses. You might want one for a teenage retreat, as a place to work, as an extra space for visiting family or even to rent. Each of these will require a slightly different design to ensure that you’re making the most out of your granny flat. And as with any addition, how you design and build your dwelling will determine how much value it can really add to your property.

That being said, according to CoreLogic and Archistar analysis, you can typically expect to see your property increase in value by a whopping 30% when you factor in a granny flat. This study also found that over half a million property owners across the eastern parts of Australia have the space to easily add an external dwelling and take advantage of this huge leap in property value. If you’re one of those homeowners, it’s definitely worth considering a granny flat addition.

Generate a New Household Income Stream

Your granny flat can do more than just add resale value to your property, however. It’s also a fantastic way to generate new household income in the form of rent. In fact, the CoreLogic and Archistar study found that a new granny flat could boost your potential rental income by as much as 27%.

Because they are affordable options, self-contained dwellings like granny flats are hugely attractive to renters. This means they are easy to rent, and keep rented, which ensures a steady stream of income to you and your family.

Co-Founder of Archistar, Robert Coorey said, ‘Many home-owners are sitting on a pot of gold in the form of excess land that could be developed to generate a new income stream. This has wider economic benefits for renters who want to access popular suburbs without paying a premium’.

More Bang for Your Buck?

Of course, how much profit you can make on your specific granny flat addition will depend on many factors. This includes the execution of the build—the amenities installed, the size of the flat, the finishings, the access to outdoor space, parking options, your specific suburb and all the other elements that make a property more desirable.

In terms of rental income, the execution matters of course, but the location will be of premier importance. For example, while the majority of Queensland has experienced rental increases, Gold Coast rental prices have taken a huge upswing. New CoreLogic figures show that average rents climbed by a huge 3.5% during 2020, and the median weekly rent is now $485 per week, higher than most parts of Brisbane. Also, the average time that a rental property stays on the market in the Gold Coast is only two weeks—the lowest of any region.

One way to get a sense of the types of rental income you might see in your specific location is to view the RTA’s Median Rents Finder.

How Much Profit Can I Make?

One way to get a sense of the types of rental income you might see in your specific location is to view the RTA’s Median Rents Finder.

Getting Started

It’s Got to Be Legal

There are many reasons to invest in a granny flat, but if you want to ensure that your granny flat will add value to your property, you need to look at your new addition through the eyes of a potential investor and even prospective tenants. And the first step is ensuring that it’s a legal dwelling.

Working with experts, like our team at Pop Up Homes, can help you understand what you need to do to ensure that you’re building a legal, and rentable, building.

Get the Practicalities Right

Looking at your build through the eyes of investors and renters will also help you to get the practicalities right. From planning for secure parking, to understanding how renters feel about private entrances, you can make sure that you’re making good long-term financial decisions.

Add Value to Get Value

It’s also important to remember that granny flats can differ vastly in quality. It’s vital that you choose the right builder, who can provide solid construction and designs that are attractive to tenants. Then you can guarantee that when you ask yourself the question, ‘do granny flats add value’, you’ll be able to answer with a resounding yes.

Pop Up Homes are experts at providing value-adding granny flats to your existing property. You have your choice of designs that are perfect for your specific needs, and, more importantly, that give you the opportunity to grow the value of your own home.