Should I Build a Granny Flat or a Tiny House?

Granny Flats and tiny homes have skyrocketed in popularity as Australians search for affordable, space-efficient living solutions amidst the ongoing housing crisis and rising cost of living. Whether you want to create another income stream or an independent retreat, deciding between the two can be tricky.

In this blog, we’ll break down the key differences to help you choose the best fit for you.

What is a Granny Flat?

A Granny Flat is a self-contained living unit typically on the same property as a primary residence. The purpose of these secondary dwellings is often to accommodate elderly family members, provide extra rental income or create a guest space. Featuring all the essentials of a larger home, such as a kitchen, bathroom, bedroom and living area, Granny Flats are designed with permanent living in mind.

Granny Flat Layout and Size

Granny Flats usually range from 40-60 square metres and include one or two bedrooms along with a compact kitchen, bathroom and small living area. The layout often resembles a small apartment, offering the comfort and convenience of a traditional home, just in a more compact form.

What is a Tiny House?

A tiny house is a compact, minimalist home typically built on a trailer chassis and wheels, embraced by those looking for an alternative lifestyle. Designed to embrace the principles of sustainable living, tiny houses contain all the essentials, including a bedroom, kitchen, bathroom and small living area, with a significantly smaller footprint.

Tiny House Size and Layout

Tiny houses are generally between 10 and 30 square metres. Their layout is compact, often including loft spaces for sleeping and creative storage solutions to maximise space. Tiny houses are the go-to choice for people who prioritise simple living with minimal possessions.

Cost Comparison of Granny Flats vs Tiny Houses

Granny Flats can range from $145,000 to $250,000, depending on the building’s size, materials and finish. In Australia, these buildings usually require council approval and are subject to building codes and property size restrictions, which can all add additional costs.

Tiny houses, on the other hand, typically cost between $90,000 and $200,00, making them a cheaper option upfront. However, they can vary considerably depending on design choices and the level of craftsmanship involved. Additional costs may arise from solar power systems, off-grid water solutions or transportation.

Being permanent structures, Granny Flats may increase the overall value of your property and attract long-term tenants. Tiny homes, while more flexible in terms of mobility, may offer lower rental yields due to their size and location restrictions. While both options entail ongoing maintenance costs, utilities, and insurance, Granny Flats generally have higher long-term investment potential and resale value.

Space and Lifestyle Considerations

Granny Flats provide more living space and are better suited to people who need a more permanent living arrangement. They are a great choice for elderly relatives, families with adult children, and those looking to earn a rental income.

In comparison, tiny houses are a lifestyle choice designed for buyers who embrace minimalism, sustainability, and a modicum of flexibility. While they offer less space, they are popular choices for individuals looking to embrace simplicity and a flexible, off-grid lifestyle. Many tiny homes are featured on Airbnb, where their charming, cosy designs attract guests seeking a unique, alternative getaway experience.

What Legal and Regulatory Differences Exist?

Granny Flats in Australia are subject to zoning laws and council permits, including rules on minimum land size and distance from the main residence. Each state and territory have different regulations, so it’s essential to consult with your local council before beginning construction.

Due to their mobile nature, tiny homes face a different set of regulations. Sometimes classified as caravans, these spaces fall under different rules for parking and long-term living. In some areas, tiny houses are not allowed as permanent dwellings and can only be used for short-term or temporary accommodation.

With the current property market presenting many challenges for Australian families, many state and local authorities are making changes to secondary dwelling laws to provide more housing options. It’s crucial to check with local councils before installing a tiny home in your backyard to avoid any potential headaches in the future.

Should You Choose a Granny Flat or a Tiny House?

When deciding between a Granny Flat and a tiny house, the choice ultimately comes down to your individual preferences, budget and long-term needs. If you need more space and are looking for a real estate investment, then a Granny Flat might be a better option. With its permanence and larger floorplan, it is well suited to both housing family members and generating rental income. However, it does have disadvantages. These dwellings usually come with a higher price tag and are subject to more stringent council regulations.

For those embracing minimalism and mobility, a tiny house might just be the perfect fit. Tiny homes are generally more affordable and have great appeal for those looking for a flexible, off-grid lifestyle. With all the amenities of a larger home, they are great for temporary living or as a unique short-term rental. However, you may come up against restrictions on their long-term use depending on where you live.

For more information, call or book a consultation with the experts at Granny Flat Solutions to see whether a Granny Flat is the right fit for your property and lifestyle. Our team can guide you through the entire process — from initial planning to understanding the laws, rules and regulations.

We understand your situation and property are unique and can provide tailored advice and practical tips to ensure you get the most out of your space. Get in touch with us today to explore your options.