Next-Level Living: How to Build a Granny Flat on Your Parents’ Property with Ease

Once designed as a place for granny to reside, secondary dwellings are now just as likely to house adult children.

While parents providing financial support to adult children to help them enter the housing market is nothing new, the bank of mum and dad is increasingly keeping the housing dream alive, particularly in markets like Sydney and Melbourne, where young buyers are priced out of real estate.

With few alternatives to the housing crisis, building a Granny Flat is a solution that can benefit both parents and their adult children. Here’s what you need to know about building a Granny Flat on your parents’ property.

Benefits of Building a Granny Flat on Your Parents’ Property

Many local governments have made it easier to build Granny Flats to address housing affordability and urban sprawl. So, if you need to move back home or can’t afford to move out but don’t fancy sharing a bathroom with a teenage family member, building a secondary dwelling on your parents’ block could be a solution. There are a variety of ways in which the accommodation arrangement can suit both parties. For parents, a secondary dwelling can:

• Boost the value of a home.
• Provide rental income.
• Provide homeowners with independence as they age.
• Allow parents to be close to family members who might otherwise have to reside far away where housing is more affordable.

For adult children, building a Granny Flat on the land of a parent can:

• Provide you with a stable housing solution over renting.
• Be a lower-cost or no-cost option, allowing you to save for your first home.
• Allow you to help an ageing parent around their home. For example, by maintaining the garden.
• Provide an opportunity for childcare or pet sitting.

Is This Type of Multigenerational Living Just a Temporary Solution?

Depending on your requirements, building a secondary dwelling in the backyard of a parent’s home or attached to their main residence doesn’t necessarily have to be just a temporary solution. More parents are seeing this as a way to downsize by moving into backyard units once occupied by their children and allowing the children to live in the main home with their young families.

Specialist Granny Flat builders such as Granny Flat Solutions offer various designs, including 3-bedroom dwellings, so it’s entirely possible to accommodate your whole family and embrace multi-generational living.

Things to Discuss Before Building a Granny Flat on Your Parents’ Property

There are a lot of considerations when it comes to Granny Flat arrangements, so families must discuss these issues before they start the process. 

Just because you’re their child doesn’t mean they are financially responsible for you for life, and it’s important to remember that Granny Flats cannot normally be subdivided from the main home. As a secondary dwelling, it can only exist in relationship with the primary dwelling and not on a separate title. 

Making a Granny Flat Agreement

While families often believe they can live in harmony, making a Granny Flat agreement, with everything in writing, is still important. Some issues that should be discussed include:

• Who will cover the cost of construction? Will the children pay for the building process if they are to live in the home, even though they will not legally own the building, or will parents have to find money in their budget to construct the Granny Flat? Who deals with the builder and selects the materials?
• Will there be adequate access to construct a Granny Flat, or is some disturbance for the homeowners to be expected? Do you agree with the design? For example, if you want to build a sustainable eco Granny Flat to save money on bills.
• The structure of living arrangements now and into the future. Will you rent from them, or will you live rent-free in exchange for providing upkeep of the gardens, for example? If they are seniors who receive a Centrelink pension, how will this affect them? Would your parents transfer the main property to you in the future, and would you provide them with an agreement to accommodate them for life with a Granny Flat interest?
• What would happen if your parents were to separate and need to sell the main home?
• Who pays for insurance on the second residence? A Granny Flat is likely an asset that is covered under the insurance policy on the primary residence, but will you contribute to the payment?
• Can you provide financial assistance with connecting utilities and services such as water or phone lines for the Granny Flat? You’ll also need to know if they expect you to contribute to council rates and who will pay for the long-term maintenance of the building.
• What if there are disagreements or changes to either party’s situation? What are your rights and theirs regarding privacy?
• Will you have the right to live in the Granny Flat without a formal lease agreement? What are the terms? Do your parents have any other rules that they expect you to follow? It’s important to make these decisions now so that you can come to an agreement that suits both of your needs and enjoy your own space.

Take the Next Step and Speak to the Granny Flat Experts

As long as both parties are clear on how the arrangement will work, building a Granny Flat on your parents’ property can help you save money and embrace multigenerational living and the perks that come with it.

If you’re ready to take the next step toward building a Granny Flat to keep your loved ones close, call the multi-award-winning builder of Granny Flats, Granny Flat Solutions, for a site inspection today. We have a range of Granny Flat designs available to suit any budget or block, whether you’re in Sydney, the Central Coast or the Illawarra region. See our website for inspiration or give us a call on 1300 160 320.