Phone: 02 94817443

Property Investment

Granny Flats are ideal for Property Investors & Landlords who want to earn amazing returns on their investment and simply make more money. Other forms of investment, such as the stock market, are far less attractive options and can’t match the high rate of Return of Investment (ROI) achieved by property investors that have built Granny Flats on their properties.

Since the new Affordable Housing SEPP was introduced in 2009 the vast majority of Granny Flats that have been built have been for property investors that were looking to achieve a second rental income from their property.


  • Earn more money (usually over $1,000 a month after interest payments) by generating a second rental income the legal way.
  • Achieve a return on investment (ROI) of around 20%.
  • Change a negative geared investment into a positive geared investment, helping investors to  pay off their mortgage quicker and in turn able to purchase more properties.
  • Increase the re-sale value of their property, helping you maximize the capital gain from the property.
  • Additional tax depreciation benefits increase your ROI even further.

Investment Examples

We have provided realistic financial examples on the Return on Investments (ROI) of Granny Flats.

The ROI shows the annual rent return as a percentage of the total investment. These examples don’t take into account individual circumstances, financial position, depreciation and other factors which may make the investment even more profitable.

An Investor’s Story

A recent Client of ours purchased an investment property in Plumpton in Western Sydney. The sole purpose of purchasing this property was to obtain a dual income from both the main house which was already tenanted and constructing a Granny Flat in the backyard. The Clients are already seasoned investors with several properties in their portfolio however this is the first Granny Flat they have built.

Initial Financial Outlay

The initial design and approval fees were $8,800 which included a contour survey of the property by a registered surveyor, meeting with the Design Team to formulate the concept, agreeing on the design and obtaining all necessary information that was needed to be provided to the Private Certifier: Structural engineering, stormwater and BASIX reports are all obtained.

As the property met the Complying Development Requirements under the State Environmental Planning Policy (Affordable Housing), the cost in both time and money to have the development approved was significantly less than the Development Application process through Council.

As a guide, the Complying Development process takes about 6 weeks from tender acceptance to when construction can begin (including notification to neighbours and Council). The Development Application process can take 2-6 months depending on the Council and cost $10,000 or more just to get the Development approved on top of the design fees.

Construction Begins

With purchasing an older house there is always going to be some “undocumented” features that need to be dealt with. In this case, an old underground pool was filled in with rubble including tree roots and rubbish that all needed to be removed before construction started. Depending on the type of pool and soil, there can be several options to drill the piers to stabilise the slab. One option is to use screw piers, however in this case the rubble was removed and the piers drilled successfully. Once this rubble was removed, construction proceeded smoothly.

Certification of Building Works

As with all new developments, a qualified person is required to inspect the works at milestones within the project. The Private Certifier views the property when the piers are drilled, the slab is poured, the frame is erected, the waterproofing is completed and finally at completion. The Granny Flat needs to be fit for occupation so items such as the shower screen, kitchen and bathroom all need to be completed for the Final Inspection to occur.

In conjunction with the Final Inspection occurring, documents from a number of trades including pest and window glazing are provided to the Certifier for their collation with the required standards. Once all documents and outstanding works have been completed, the Private Certifier will issue a Occupation Certificate so that the Granny Flat can be occupied.

The Finished Product

The Granny Flat was rented out before construction was finished allowing immediate returns on the issuance of the Occupation Certificate.

(a) Cost to build a Standard Granny Flat (with Upgrades including carport)$115,000 
(b) Average Rent Return per week$400
(c) Repayments at 5% interest (a x 5%)$5,750
(d) Repayments per week (c / 52 weeks)$111
(e) Additional Earnings per week (b – d)$289

Which is an additional $931 per month (e x 4.33 weeks) 

Other Examples of Granny Flat Returns and the extra income you can earn

Look at the different examples below to determine the ROI you can achieve for different types of Granny Flats – or visit our website & click on our on-line calculator to calculate the ROI of your Granny Flat.

Studio Granny Flat 1 bedroom Granny Flat 2 bedroom Granny Flat
Weekly RentROI%Extra earnings per weekWeekly RentROI%Extra earnings per weekWeekly RentROI%Extra earning per week


Prices based on:

  • Studio Granny Flat:$68,000
  • 1 Bedroom Granny Flat: $88,000
  • 2 Bedroom Granny Flat: $108,000


The figures used in the examples above are based on average current rentals of Granny Flats in the Sydney area & with an interest only rate of 7.5%.

  Building prices may vary subject to your site condition & any council or BASIX requirements. The examples don’t take into account individual circumstances, financial position, depreciation and other factors which    may make the investment even more profitable.





Ph: (02) 9481 7443

Or visit our SHOWROOM at:

Unit 20, 7 Sefton Road, THORNLEIGH NSW 2120