Rental Income by Granny Flat Size
These are real rental figures from our portfolio of 87+ investment properties across Melbourne:
30m² Standard Studio (1-bed, 1-living):
- Base rent: $340–$360/week
- Bills-included rent: $370–$390/week
- Best for: Singles, students, young professionals
- Vacancy rate: <2% (high demand for affordable studios)
60m² Two-Bedroom Unit:
- Base rent: $480–$500/week
- Bills: Case-by-case (typically $40–$60/week additional)
- Best for: Couples, small families
- Higher per-unit income but lower ROI percentage than 30m²
Dual Living (2 × 30m² Studios):
- Combined rent: $650–$700/week
- This is the maximum yield strategy — two independent tenants on one lot
- Requires slightly larger block (650m²+)
- Combined annual income: $33,800–$36,400
Pro tip: 30m² studios offer the best ROI because construction cost is lowest ($110K) while rent is proportionally higher. Two 30m² studios earn more than one 60m² unit.
How a Granny Flat Transforms Your Property Yield
The real power of a granny flat isn't the standalone income — it's what it does to your overall property yield:
Before granny flat:
- Property value: $689,000
- Weekly rent (main house): $600
- Annual rental income: $31,200
- Gross yield: 4.5%
After granny flat (30m², $170K total cost):
- Total investment: $859,000
- Combined weekly rent: $1,240 ($600 house + $640 granny flat bills-included)
- Annual rental income: $64,480
- Gross yield: 7.5%
After granny flat (dual living, $200K):
- Total investment: $889,000
- Combined weekly rent: $1,300 ($600 house + $700 dual)
- Annual rental income: $67,600
- Gross yield: 7.6%
This yield transformation is what makes Melbourne's southeast corridor so attractive — you buy a $689K house on 600m² and turn it into an 7.5%+ yielding asset.
Refinance & Equity Recovery Strategy
A granny flat costing $110,000 to build typically adds approximately $150,000 to your bank valuation once the Occupancy Certificate is obtained.
The refinance play:
- Build granny flat: $110,000 + GST
- Obtain OC (3 days after completion)
- Request bank revaluation: Property now worth $150K more
- Refinance at 80% LVR: Extract up to $120,000
- Net cost after refinance: effectively $0 — you've recovered the full construction cost
Timeline: 3–6 months from settlement to refinance completion
Use the extracted equity for:
- Deposit on your next investment property
- Fund a rooming house conversion on another property
- Build another granny flat on a different property
This is the "velocity" strategy our clients use to build a portfolio of 3–5 properties within 5 years, each generating 6%+ yields.