Dual-Income & Granny Flat Investment Properties
Double Your Returns With a Purpose-Built Granny Flat
Dual Income Property Investment
Dual-income and granny flat investment — two property types that both create significant rental income.
Unlike traditional single-dwelling buildings, these purpose-built designs combine a house with a secondary dwelling on the same block — giving you two income streams.
Property Portfolio Solutions (PPS) has helped countless investors like you maximise their returns with purpose-built dual-income strategies. Whether building on undeveloped land or a knock-down/rebuild — we can help you reach your financial goals and property vision.
Granny Flat Investment Property — How It Works
With a dual income property — such as a block featuring a main dwelling and additional granny flat — you enjoy two rental incomes from one property title.
This can deliver impressive cash flow, while you may also benefit from increases in the asset’s value over the long term.
Here’s the typical process:
Identify a Suitable Block
You have two choices — either buy an empty block, or find an existing property with the potential for a knock-down and rebuild. The crucial factor is that you locate land with council permission for dual-dwelling development, or where an application for a granny flat is likely to be approved.
Design and Build
Plan and erect two living spaces — a main dwelling and a self-contained secondary premises on the same block. This gives you two clear inhabitable areas, each with their own bathroom, kitchen, and living spaces.
Receive Two Rent Streams
Let the properties to different tenants, and you begin to receive dual income from a single property title — effectively generating more cash flow than you would have received from just one building on the block.
Are Granny Flats a Good Investment?
Dual-income properties provide a tempting opportunity for investors like you to maximise rental return — and make your portfolio diversified and balanced.
The reasons why so many first-time and seasoned investors consider dual-income properties as a good investment include:
Improved cash flow — effectively, dual-income properties double your monthly rental income, allowing you to meet necessary expenses and/or use for future investment.
Low risk — should one tenant fall into arrears or leave, you will still enjoy income from the other property, lowering your financial exposure.
Affordability — a single block, yet double income, allows you to maximise affordability.
Flexibility — use the secondary property for family, long-term lets, or short-term rentals, such as Airbnb.
Tax advantages — factors such as depreciation and deductions may inadvertently provide favourable taxation outcomes.
Long-term growth — enjoy potential capital growth if the value of your dual-income property appreciates over time.
Do Granny Flats Add Value to Property?
In virtually all circumstances, a secondary dwelling on a single block adds value by creating another rental income stream — making your property more attractive to investors seeking reliable cash flow.
However, just knocking up a quick, cheap, secondary premises on any block isn’t a guaranteed route to generating extra value.
Factors That Can Affect the Value of Dual-Income Properties:
Construction quality
A property that utilises quality, durable materials and is finished to a high standard adds more value than a bargain basement build.
Council regulations
Ensuring the dual-income property ticks all the relevant regulatory and approval boxes makes it more attractive to cautious investors.
Location
A granny flat in a high-demand area can mean higher rents, making the property tempting for potential investor buyers.
Design and practicality
A nicely designed secondary dwelling that maximises space, privacy, and functionality is more appealing than one with a haphazard layout and appearance.
Property size and layout
The area of the entire block should effortlessly accommodate the secondary dwelling, without hindering the desirability of function of the main premises.
A strategically designed, well-constructed, and thoughtfully-located granny flat can be a powerful tool for adding capital and resale value to your real estate portfolio. PPS will guide you towards maximising uplift through dual-income property development.
New Build vs Knock-Down Rebuild — Your Dual Income Investment Property Decision
You have two main choices — a new build on a vacant block, or deciding to knock down an existing property and rebuild. Both strategies deliver their own upsides and downsides — with your ideal option depending on your circumstances, budget, risk tolerance, and ambitions.
Building New on an Empty Block
Benefits
Design flexibility — with a clean slate, you can create your tailored design, building two properties that both address tenant requirements and market demand.
Straightforward approvals — empty blocks usually have fewer barriers and restrictions, allowing for prompt groundbreaking.
Fewer construction issues — you don’t have to worry about demolition, or hazardous material removal, etc.
Challenges
Land expenses — a suitable vacant block in a wished-for location can be costly in high-demand, key areas of Sydney.
Infrastructure issues — some blocks may require significant work to connect them to water, electricity, drainage, etc.
Timeframe — although usually more rapid than a demolition/rebuild, you may still face lengthy registration, approvals, and construction setbacks.
In a time of overwhelming chaos and change, it is refreshing to come across a business that keeps it simple — focusing solely on the customer’s needs.
★★★★★
Tracey Farrant, Wodonga Vic
Knocking-Down and Rebuilding
Advantages
Optimal locations — finding properties in a high-demand, well-serviced area is more straightforward than empty blocks.
Improved space utilisation — you can transform outdated or underperforming single properties into a higher-yield main dwelling and additional property.
Cost savings — if you already own the property as a single-income investment, you could boost your cash flow by knocking down and creating two properties.
Challenges
Demolition and preparation — you need to consider the costs of knocking down, preparation, and the timescale. Every week that passes is lost rent.
Council approvals — heritage areas or locations with development controls may make it difficult to obtain permission to knock-down and rebuild.
Unexpected problems — unforeseen issues can hinder progress and mean additional costs, such as hidden asbestos or unsafe ground conditions.
At PPS, we walk you through your possible options. By considering your investment goals, expected timeframe, budget, and risk tolerance — we can guide you through the whole dual-income development process from start to finish.
In a time of overwhelming chaos and change, it is refreshing to come across a business that keeps it simple — focusing solely on the customer’s needs.
★★★★★
Tracey Farrant, Wodonga Vic
Granny Flat Tax Implications
Having a dual-income property may provide favourable tax outcomes. This could include deducting expenses such as mortgage interest, management fees, and repairs and maintenance — as long as they are incurred in generating rental income.
Furthermore, your taxable income may possibly be further reduced by the cost of depreciation on renovated or newly built units. Bear in mind, that income from your granny flat must be included on your tax return — and you might face capital gains implications if you decide to sell.
How these factors affect your tax position depends on your personal circumstances. For example, if you live in one of the dwellings, the titling of the units, the amount of the granny flat tax deductions, and other income you may receive.
Since taxation can be complex, we recommend you seek professional advice from a qualified accountant or financial advisor.
Maximise Your Investment Potential With PPS
Dual-income properties are highly efficient for generating reliable rental income, diversifying your portfolio, and increasing your property’s market value. By your side at every step, PPS will guide you in planning and fulfilling your granny flat investment.
Your Route to Granny Flat Success With PPS:
Tailored strategy — making sure your dual-income property works to meet your goals and dreams.
Ideal locations — we help you find the best blocks for new dual-income property builds or knock-down/rebuild projects.
Complete process — taking care of everything, from vision to completion.
Strategic design — we collaborate with you to create a functional, attractive granny flat that appeals to tenants or potential investor buyers.
Quality construction — partnering with trusted and affordable wholesale builders.
Stress-free project management — as we look after the day-to-day build and development, you get the benefits without the headaches.
Clear communication — no buzzwords, no industry jargon, no hidden fees.
Market knowledge — we utilise our extensive understanding of local trends to help you maximise rental returns and property value.
Trusted network — we partner with experienced, reliable, and trusted builders who use high-quality materials.
Proven results — an exemplary track record, helping countless property visionaries reach their dual-income property dreams.
Granny Flat and Investment Property FAQs
What Is a Granny Flat?
A granny flat is a self-contained secondary dwelling on the same block as a main house. Usually, it will feature a bedroom, living area, and kitchen — giving it independent living space.
Do Granny Flats Add Value?
Granny flats increase the value of property in several ways, including:
- Double rental income — granny flat and main dwelling.
- Lower vacancy risk — if one tenant leaves, you still have another in the secondary property.
- Relative affordability.
- Potential tax advantages.
- Attractive for prospective buyers/investors.
How Much Rent Will I Get From a Granny Flat?
The size of the granny flat’s rental income depends on your property’s size, location, features, and desirability. Checking out the rental prices for similar properties like yours will give you a fairly good idea of the income you can expect.
What Are the Typical Problems of Granny Flat Investments?
The most common challenges you may encounter include working through council regulations for approvals, checking the block is suitable for dual properties, and managing two tenants who live very close to one another.