How much do Granny Flats increase the value of a home?

December 16, 2022

The benefits of constructing a Granny Flat are many, ranging from the creation of a quiet space for work or study, a safe haven for teenagers, a comfortable place for visitors to stay, or a more affordable option to a care facility residence for ageing family members. With all this utility, it makes sense that adding a Granny Flat would raise the value of the entire property.

What is the increase in value, a Granny Flat adds to a property?


If you add a Granny Flat to your house, you could see a 30% increase in value and a 27% increase in rental income, according to a 2019 analysis by CoreLogic and Archistar. This figure, of course, will change based on the specifics of your property and the design of your Granny Flat.

You might even be able to recoup your investment in a Granny Flat through rental income before you even think about selling the main house. Indeed, owners of Granny Flats in desirable areas might get $400-$600 in weekly rent.

Possibilities for positive gearing and additional claimable depreciation schedules offered by having a Granny Flat built onto the property might be a major selling point in the future

There are two ways in which a Granny Flat may increase the value of your home:

  1. A higher asking price you might expect when selling your home after adding an additional residence.
  2. Renting out the granny apartment is a good way to bring in some additional cash.

How to ensure you increase the resale value of your property with a Granny Flat

The addition of a Granny Flat to a home may increase its worth by providing the owner with more living space, conveniences, and even rental revenue. However, the size, layout, quality of construction, and location of a Granny Flat all play a role in determining whether or not it increases the value of a property.

You will not be able to sell the Granny Flat separately from the main house or subdivide the property. If you want to attract buyers, you should think about the utility and design it with multipurpose and aesthetics in mind.

Does it go well with the façade of the current home?

How is the garden and open space between it and the main house ensuring privacy?

How many additional sleeping quarters will it provide for the house?

Could people of retirement age live there without feeling uncomfortable?

Does it have the potential to serve as a home workplace?

Is it going to be appealing to tenants because of how it looks and what amenities it offers?

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Three steps to ensure you increase the value of your property worth with a Granny Flat

Whether you're looking to increase cash flow or add more value to a home, there are a few key ways you can guarantee the value increase to your property, when you add a Granny Flat.

1. Consult with experts

These are the local real estate agents who will quickly be able to tell you how popular Granny Flats ae on properties in the area – both to rent and to buy. They will possibly even be able to show you recent listings and you can carefully research changes in value. You could also consult with a local surveyor who values homes. Questions you might ask about Granny Flat value could include:

What sort of people rent Granny Flats in this area?

For people who rent Granny Flats, what sort of amenities do they expect?

What size and number of bedrooms is most popular for Granny Flats?

How much do Granny Flats in the area rent for?

What are you seeing with regards to sales of properties with dual occupancy or Granny Flats?

Other experts you could consider consulting include builders who are used to working with investors, and mortgage brokers who have access to the best investment offers.


2. Consider upgrades and things to give a premium look

You can always expect a higher rate of return on your investment, being able to charge more for superior design and usability. Make sure you include tenant-friendly features like storage, outdoor living space, and private entrances.

It’s easy to compare a Granny Flat to an apartment as they are often similar in size. Directly comparable features include fixtures and fittings – so don’t automatically look to install all the cheapest options. Non comparable features however can include outdoor space, ground floor positioning and thoughtful layout.

3. Premium construction and design gets noticed.

For maximum resale value a Granny Flat should feel like it belongs there with the main house. Consider having a similar facade as the main house for the Granny Flat - or conversely upgrading the main house when you build the new addition.

Renters and buyers will all notice the build quality - expectations of a Granny Flat are no longer of a converted garage as temporary living - but of an actual beautiful little home! When looking at builders, make sure you can view an already built Granny Flat to know the quality.

Positioning is key. Seamless integration with the look of the main house is important but so is privacy for each home were people to live their separately. Managing position on the block to allow private parking and access for each home would be ideal - and as mentioned, when you get it right, the Granny Flat value could add up to 30%.


Free On-Site Assessment at Your Property

Interested in finding out how to make a positive investment from a Cubitt's Granny Flat or Home Extension? Get in touch for a no-obligation site inspection today.

If you are looking to purchase a new property and want to do a Granny Flat Suitability Check - please use this form instead.

We require your name, email and phone number to get back to you - and the more you can tell us about your build project, the more effectively our local teams can help.


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About Kate Cubitt

Kate is Managing Director of Cubitt's. She is an experienced company director, avid investor and keen to share the financial insight she's gained being a female leader in the building industry.