Choosing to invest in a granny flat for your property comes with a host of personal value; keeping relatives close by, having a space for guests or offering grown kids an interim living space that’s safe, there’s a lot to benefit from. However, granny flats also offer a lot of value to your existing home and property. The specific value added to your property will vary depending on a range of factors such as size, location, quality of construction, current real estate market and buyer preference. There are some general areas of increased value, though, that typically come with building a granny flat on your property. 

Increased living space will always increase value

A granny flat increases the livable square footage of your entire property offering, which increases its general value. You’re adding bedrooms, living spaces and bathrooms to your property’s specifications, which will invariably place you in a higher value bracket in the real estate market. Whether you’d want to actually sell, or if you’re looking for a high appraisal or valuation for borrowing purposes, adding functional, liveable space to your property commands a higher price compared to otherwise similar homes without granny flats. 

Rental income potential

Granny flats can provide an opportunity to generate rental income and can contribute to the overall value of your property.

Renting out a granny flat can provide a cost-effective alternative to purchasing or leasing a standalone property for renters (in a very difficult rental environment), benefiting both landlords and tenants. In fact, the NSW government is actively encouraging homeowners to construct and rent out granny flats as part of their efforts to promote affordable housing.

However, before embarking on this backyard venture, it’s crucial to research! There are regulations in NSW and financial considerations to fully understand before renting out your granny flat. 

Growth of multi-generational living

In some cases, families may value the option of multi-generational living arrangements. A granny flat can provide a separate living space for extended family members, such as aging parents or adult children, which can be appealing to buyers who value such accommodations. It can also be a non-negotiable, though difficult thing to find, for a lot of property-seekers. Adding a granny flat could land you right in the lap of people seeking to put functional ticked boxes as the highest priority, even above cost. 


The demand for granny flats has been increasing in recent years due to changing housing needs and affordability challenges. Depending on the local market, the presence of a granny flat can make your property more desirable to buyers seeking flexible living arrangements or additional income potential.

Quality of granny flat

This might be the biggest factor of them all. Your granny flat is only going to be desirable to a buyer or renter if it’s in a condition that meets their standards in aesthetics, functionality, and even safety. If you have a quality guarantee with a known reputable granny flat builder like Acrow, the peace of mind of buyers will be there, and be a plus to the overall value of your property.