--- title: "Granny Flat Build at Vivien Court: From $550 to $900 a Week in Rent" description: "Live granny flat case study: Vivien Court property transformed from $550/week single rent to $900/week dual income. $110K build, 18% ROI on construction cost. Full walkthrough." author: Yan Zhu date: 2022-12-05 category: Investment Strategy url: https://premiumrea.com.au/blog/vivien-court-granny-flat-dual-income-high-yield-walkthrough tags: ["granny flat", "dual income", "case study", "construction", "rental yield", "walkthrough"] --- # Granny Flat Build at Vivien Court: From $550 to $900 a Week in Rent *By Yan Zhu, Co-Founder & Chief Data Officer at PremiumRea — 2022-12-05* > I filmed this walkthrough standing in a freshly poured slab that was still warm from yesterday's pour. The granny flat at Vivien Court is three months into construction, and the numbers have already been validated by the rental appraisal. This is what a live build looks like from the inside. I filmed this walkthrough standing in a freshly poured slab that was still warm from yesterday's pour. The granny flat at Vivien Court is three months into construction, and the numbers have already been validated by the rental appraisal. This is what a live build looks like from the inside. Not a completed case study with the benefit of hindsight. A project in progress where I can show you the construction decisions as they are being made and the financial projections before they are confirmed by real tenants. Let me walk you through it. ## The property and acquisition context The Vivien Court property sits in Melbourne's southeast corridor, in a suburb where our firm has significant transaction history. The existing house is a three-bedroom, one-bathroom brick veneer on a block exceeding 600 square metres. Purchase price: mid $600,000s. The property was acquired through our standard process: HTAG data screening, on-the-ground suburb verification, building inspection, Section 32 review, and negotiation. The vendor accepted a price approximately $25,000 below their initial expectation after we presented building inspection findings that documented roof tile deterioration and minor plumbing issues [1]. Current rent for the main house: $550 per week. That is a gross yield of roughly 4.3 per cent on the purchase price alone. Not bad, but not the kind of return that builds a multi-property portfolio through cash flow alone. The block configuration is ideal for a granny flat. Clear 3.5-metre side access. Sewer connection within 8 metres of the rear build zone. No easement through the build area. Existing switchboard with adequate capacity. All five pre-purchase granny flat criteria met [2]. ## The granny flat build: live construction details The granny flat is a 30-square-metre one-bedroom studio. Open-plan kitchen and living area, separate bathroom with shower and toilet, and a small covered outdoor area at the entrance. Build cost: $110,000 plus GST. All-inclusive. The price covers site preparation, slab, timber frame, roofing, internal fit-out, plumbing connection, electrical connection, painting, and basic landscaping around the perimeter [3]. At the time of this walkthrough, the slab has been poured, the frame is going up next week, and the plumber has pre-laid the rough-in pipework. The build timeline from contract to occupancy certificate is approximately 4.5 months: 6 weeks of permits and planning followed by 12 weeks of construction. One detail worth noting: the slab design includes a step-down at the entrance to manage the natural fall of the block. Without this step-down, surface water would flow towards the granny flat entrance during heavy rain. Our builder identifies these drainage micro-issues during the site assessment and resolves them in the slab design rather than retrofitting drainage solutions after construction. It is a small detail that prevents a major headache. The kitchen will include a full-size cooktop, a 90-litre oven, a single-bowl sink, laminate benchtops, and overhead storage. The bathroom will have a full-size shower recess, wall-hung vanity, and a mirror cabinet. Standard fixtures throughout. Durable, replaceable, tenant-proof. I keep coming back to the same principle: invest in durability, not aesthetics. Premium fixtures in a $350-per-week rental generate zero additional rent and cost three times as much to replace when they inevitably get damaged. ## Projected rental outcome and yield calculation The rental appraisal for the granny flat: $350 per week, bills included. This is consistent with our experience across dozens of similar builds in the southeast corridor. 30-square-metre studios with modern fit-out, self-contained kitchen and bathroom, and independent access consistently rent in the $340 to $390 range depending on the specific suburb [4]. Projected combined rent: - Main house: $550 per week - Granny flat: $350 per week - Total: $900 per week Total investment: - Purchase: $650,000 (approximate) - Granny flat build: $110,000 - Renovation and contingency: $15,000 - Total: $775,000 Gross yield: $900 times 52 divided by $775,000 equals 6.0 per cent. Return on granny flat construction cost: $350 times 52 divided by $110,000 equals 16.5 per cent. Payback period: approximately 6 years [5]. In a rate environment where the average investment property yields 3 to 4 per cent gross, a 6 per cent yield on total investment puts this property in the top decile of Melbourne investments by cash flow. Our property management division will manage both the main house and the granny flat tenancy. Each property manager in our team handles a maximum of 50 properties, not the 170-plus that is standard in the industry. That ratio means responsive communication, proactive maintenance, and tenant retention rates that translate directly into lower vacancy and higher long-term cash flow [6]. ## The refinancing play and what comes next Once the granny flat receives its occupancy certificate and has a confirmed tenancy, we will commission a bank valuation. Based on our experience across similar builds, the valuation uplift from a $110,000 granny flat is typically $120,000 to $150,000. The bank capitalises the additional rental income into the property value, meaning the property is worth more than the sum of its parts [7]. At 80 per cent loan-to-value ratio, the client can refinance and extract $50,000 to $80,000 in equity. Tax-free. That equity becomes the deposit for the next acquisition. This is the cycle. Buy. Build. Rent. Refinance. Repeat. It is not glamorous. It does not make for exciting dinner conversation. But it is the most reliable wealth-creation mechanism in Australian residential property. Vivien Court is property number three for this particular client. The equity extracted from their first granny flat build funded the deposit for property two. The equity from property two funded property three. At no point did the client need to save additional cash beyond their initial deposit. The portfolio funded its own expansion. That is the power of the granny flat strategy. It is not just a rental income play. It is an equity manufacturing play. And when you combine manufactured equity with professional property management at a 1:50 ratio and renovation-driven yields above 5 per cent, you get a self-sustaining portfolio that grows faster than the market average. Vivien Court is not our flashiest build. It is our most recent. And in three months, when the tenants move in and the first rent payment lands, it will be another data point confirming that the formula works. ## References 1. [PremiumRea negotiation data. Vivien Court: $25K below vendor expectation via building inspection leverage.](#) 2. [PremiumRea pre-purchase granny flat checklist. Five criteria: 550sqm+ block, 3m side access, sewer <10m, 2 parking spaces, no easement conflict.](#) 3. [PremiumRea construction pricing. 30sqm granny flat: $110,000+GST all-inclusive.](#) 4. [PremiumRea rental data. 30sqm studios in southeast Melbourne: $340-$390/week rent range.](#) 5. [PremiumRea granny flat performance. $350/week on $110K build: 16.5% ROI, 6-year payback.](#) 6. [PremiumRea property management. Maximum 50 properties per manager vs industry standard 170+.](#) 7. [PremiumRea refinancing data. $110K granny flat: $120-150K valuation uplift, $50-80K equity extraction at 80% LVR.](#) 8. [Victorian Building Authority, 'Secondary Dwelling Building Permits', 2020. Application process and timeline.](https://www.vba.vic.gov.au/) 9. [Domain, 'Granny Flat Rental Market', 2020. Studio rental benchmarks in Melbourne's southeast.](https://www.domain.com.au/advice/) --- Source: https://premiumrea.com.au/blog/vivien-court-granny-flat-dual-income-high-yield-walkthrough Publisher: PremiumRea (Optima Real Estate) — Melbourne buyers agent