Granny flat

A granny flat is a secondary, self-contained dwelling built on the same title as the main house - one kitchen, one bathroom, one to two bedrooms is the typical layout. They're usually limited to around 60-70 square metres of internal floor area depending on council/state rules. Investors use them to lift rental yield (rent the main house and the flat separately), and tax law allows you to rent them out commercially at arm's-length to non-family tenants without triggering CGT on the granny flat portion of the main residence. Build costs run $80,000-$180,000 depending on finish. Rental returns commonly run $250-$450/week, which often pays back the build in 7-10 years.