2021 Ultimate Guide to Granny Flat Prices
Welcome to the ultimate guide to granny flat prices. Whether you’re looking to create more living space for your loved ones or set up a smart investment in your backyard, it’s important to get clear on the cost of building a granny flat before you dive in.
From fixed price granny flats to custom upgrades, costs vary depending on the builder, type of granny flat and features you choose. In other words, to ensure you spend your dollars wisely and avoid hidden costs, you’ll need to consider more than a single price tag.
Fear not. We cover all things cost in this comprehensive catch-all to granny flat prices, including a breakdown of expenses and how to get the most bang for your buck – not to mention the value this build can add to your property and the extra income you could make from a granny flat rental.
Let’s crunch some numbers!
How much will it cost to build a granny flat?
From $20,000 to $250,000. Although when it comes to estimating granny flat prices, there’s no short answer. That’s because heaps of factors will influence the cost of building your granny flat. As not all of these are apparent to new buyers at the start of the process (especially if you’re dealing with the wrong builders), we’ve outlined the key considerations for you.
Custom built granny flats vs granny flat kit homes
At first glance, it’s easy to view a granny flat kit home from $50,000 as being a more “wallet-friendly” solution than a custom-built granny flat. While this might seem like the case on the surface, many kit home companies fail to provide the full turnkey price as supplied by custom granny flat builders.
In reality, it’s common practice for many cost factors to be, *ahem*, overlooked by these kit home company quotes. Elements which are often purposely left out include:
- Site Costs.
- Service connection.
- Electrical and plumbing essentials.
- Council or complying development approvals.
- Inclusions such as blinds, floor finishes, letter boxes and everything you’d need to move in.
With a custom granny flat quote from the right builder, you can be sure all key features are covered. But it’s not all about granny flat prices – from flexible designs to guaranteed timeframes, there are plenty of reasons why you should opt for a custom granny flat over a kit home. Thank us later!
Choosing the right granny flat builder
Once you’ve made the call to invest in a granny flat of your own, the next step is to decide on a builder who can make it happen. At this stage, make sure you choose a reputable granny flat company to take care of construction with:
- Appropriate building licenses.
- References and Google reviews.
- An informative website to prove it!
Be conscious that not all granny flat companies deliver to the same standards. Some act merely as project managers.
Some are designers or architects that may not have a building background or have the knowledge to assess what is practical on your block.
Other companies advertise a low starting price that covers the bare minimum, only to hit you with expensive extras down the line.
In fact, you might even find that these deceptively cheap companies end up more expensive than competitors who include all costs upfront.
At Backyard Grannys, we’ve changed the lives of over 700 customers and our transparent process and turnkey solutions mean you know everything (and we mean everything) that’s included in your quote from the get go. To top it off, we cover a wide range of features and services at no extra cost.
Start off on the right foot with some more tips for choosing your granny flat builder.
Granny flat plans and prices
We’ve collected price, quotes and data from over 9 companies from Sydney all the way to Newcastle and here is what we can tell you on price.
As mentioned above, the cost of building a granny flat is rooted in its:
- Site costs: Specific reports, consultations cost imposed by your site.
- Design & Approval: Architectural planning design and getting approval from council / CDC.
- Build Price: Cost to build your chosen design.
- Inclusions: Chosen finishes and features.
And of course, size matters.
How much does a 1 bedroom granny flat cost?
Minimum size: 36m²
The most affordable option, a one-bedroom granny flat is a perfect way to add some comfortable living space to your property.
Based on our research of nine granny flat builders, companies are starting anywhere from as low as $80,000 to $120,000. Always ask for what the price includes. Our research shows that standard practice for the starting prices at the lower end of that spectrum often leaves out a lot of hidden extra costs.
This practice gives the illusion of a cheaper end product. Once the complete price is revealed the buyer is too far through the process to back out and stuck with a much higher cost than anticipated.
Typically, a one-bedroom granny flat should cost anywhere between $100,000 – $120,000 which includes site costs, design and approvals, build price and standard inclusions, full turnkey ready to move in.
Typical applications for 1-bedroom granny flat:
- Airbnb retreat – they are normally a little more fancy.
- Parents wanting to provide for their kids’ future.
- Grey Nomads looking to travel more and downsize.
- Kids living with a disability who require at-home support but need their own autonomous living space.
- Downsizing to free up money to live a quality retirement and lifestyle.
- Family looking to care for Mum or Dad who are getting older, but want to avoid Aged Care.
How much does a 2 bedroom granny flat cost?
Minimum size: 60m²
The most popular choice for investors and those looking to build for family. Two-bedroom granny flats offer a lot of versatility for any lifestyle. They also provide a longer-term strategy for both family and investors alike, offering some of the best returns for property investors.
When it comes to keeping care in the family, 2-bedroom granny flats excel. They are a great way to give grandparents the independence, privacy and comfort they deserve, whilst living just steps away from your family home.
Based on a survey of companies, most builders are starting anywhere from as low as $110,000 to $132,000. Again, the price variance really depends on the builder and how much they are willing to pass on to the complete price. If you have quotes from other granny flat companies, compare the quotes carefully.
On average, a complete two-bed granny flat tends to cost between $135,000 and $145,000. This price should include site costs, design and approvals, build price and standard inclusions, full turnkey ready to move in.
Typical applications for 2-bedroom granny flat:
- Airbnb retreat.
- 1st-time property investors (a great starting point for young couples).
- Seasoned property investors looking to purchase a 5th or 6th Granny flat to positively gear their property portfolio.
- Parents helping their kids save to get into the property market by providing a granny flat for them to live in while they save money for a deposit.
- Grandparents who want to be closer to grandkids.
- Grandparents who want to unlock the wealth stored in their primary residence.
- Family looking to care for Mum and Dad who are getting older and require more hands-on care.
- Families who want to avoid putting Mum or Dad into Aged Care.
How much does a 3 bedroom granny flat cost?
Minimum size: 60m²
A popular choice among our investors, particularly if you have lots of backyard space or are located close to major educational facilities like universities and tourist hot spots. Three-bed granny flats offer the joys of a typical house for a fraction of the cost.
One consideration, when choosing to build a 3-bedroom granny flat is that you’re still restricted to the regulatory maximum secondary dwelling lot size of 60m². This means that you will need to reduce the kitchen and living room space to allow for the 3rd bedroom.
Based on Bayard Grannys research, builders are starting anywhere from as low as $112,000 to $145,000. Again, the price variance really depends on the builder and how much they are willing to hide away in the final price. As with any granny flat size, make sure to compare quotes for inclusions.
On average, a complete three-bed granny flat tends to cost between $145,000 and $155,000. This price should include site costs, design and approvals, build price and standard inclusions, full turnkey ready to move in.
Typical applications for 3-bedroom granny flats:
- Airbnb retreat – typically in tourist hot spots.
- 1st-time property investors.
- Student accommodation, especially when located near educational institutes.
- Seasoned property investors looking to positively gear their property portfolio.
There’s no doubt that this is a big investment. That said, do it right and you’ll end up making more money from your granny flat than you put down on it.
Not only does a 3 bedroom granny flat add value to your property (provided it complies with all local council regulations), you can also earn thousands of dollars each year in extra income by renting it out.
How much does a 2-storey granny flat cost?
A popular choice among our investors and those looking to build for family, particularly if you have rear lane access to your backyard or have a substantially large block.
Our research shows that 2-storey flats are being advertised at $190,00 to $250,000. As with other granny flat designs, this starting price is often understated, with many necessary inclusions hidden in the final price.
For an accurate total cost, our research suggests the actual complete price is often in the range of $220,000-250,000. This is once you take into account site costs, design and approvals, build price and standard inclusions.
Other granny flat price considerations
Choosing the foundation: Concrete slab vs bearers and joists
Let’s go back to basics. One of the first financial decisions you’ll have to make is whether to use a concrete slab or bearers and joists as your granny flat’s foundation.
At Backyard Grannys, we include a concrete slab in the standard build cost for each granny flat. As well as formwork, waffle pods and steel reinforcement, this process will involve pump hire. If you’re working with a flat site, a concrete slab is hands down the most affordable foundation for your granny flat!
It’s another story if you need to excavate and level the site or in a flood effected zone – that’s when bearers and joist floor systems come in. We offer this option to anyone building a granny flat foundation on a sloping block, a process that requires additional costs for scaffolding. That said, when you’re dealing with a steep slope, bearers and joists are more cost-effective than a concrete slab. That’s because they eliminate the need for excavation and retaining walls.
Still not sure? Check out our blog to further compare the value of concrete slabs versus bearers and joists.
The safe and cost-effective solution to caring for elderly relatives
We all want our loved ones to grow old somewhere they feel safe, supported and happy. But you don’t have to fork out eye-watering monthly charges to cover the cost of running their retirement village. You also don’t need to have grandma and grandpa move into your hectic family home, which could harm their sense of independence and comfort.
Let’s talk numbers for a minute. Many nursing homes are paid for with an upfront Refundable Accommodation Deposit, which can cost anywhere from $250,000 to $550,000 (or a daily charge of up to $50 a day). At that rate, 20 years of aged care means paying the nursing home a total of $365,000 – a sum which could have been used to build a granny flat that will live on as a valuable asset for future generations.
In short, a granny flat allows you to keep your money in the family instead of giving it to a retirement home – all whilst creating the perfect home for your loved one. By building a granny flat on your property, your relatives can enjoy privacy and independence, while at the same time receiving whatever familial support and custom accessibility they need.
Find out more about the benefits of granny flat living for elderly relatives.
A positively geared investment for your portfolio
If we haven’t caught your interest yet, maybe the fact that a granny flat could earn you $10k-$12.5k per year will.
As housing prices across Australia’s cities continue to soar, it’s becoming trickier to hunt down affordable, low-maintenance rental accommodation in popular spots. That makes a granny flat the ideal solution for many tenants.
And there’s big bonuses for the landlord, too. Purchasing or building a granny flat is usually more cost-effective than buying a standalone investment property. That means you can get your investment portfolio off the ground without taking out a large loan – not to mention the significant depreciation entitlements a granny flat will bring!
All in all, renting your granny flat is an excellent way to monetise that extra space you already own but don’t use. With an average ROI of 10-20%, you’ll enjoy a nice boost in annual income.
Here are some pointers to maximise your granny flat returns:
- Do your homework to make sure it’s a viable investment. Consider council regulations, the demand for rental properties in your neighbourhood and the cost of installing a granny flat before making your final decision.
- Source reliable quotes from builders. This will help you to form a clear picture of exactly how much the build will cost.
- If you need a loan, discuss your options with a mortgage broker. Provided you have sufficient equity in the property, you should be able to get the money you need by increasing or refinancing your existing loan.
- Adding a granny flat to an investment property. If building on an existing investment property, weigh up the cost of maintaining both dwellings and the overall rental impact of adding a granny flat to this site.
- Be consistent. To add value to your property, make sure your granny flat compliments the aesthetic of your existing home without taking up too much yard space.
So if you’ve got the space and done your research, a granny flat could be a solid venture. Get some investment inspiration from this Central Coast granny flat success story or check out our ROI calculator to discover just how much you could earn from a granny flat rental each year.