Granny Flat ROI Calculator

How the granny flat ROI numbers work

A granny flat is one of the few residential investments where the cash-flow case can be made on the back of a single page. Build cost is bounded, the rental market is unambiguous, and the regulatory pathway under NSW Housing SEPP 2021 is faster and cheaper than any duplex or townhouse equivalent. The calculator above runs the same model Buildana uses internally before quoting a granny flat client: gross yield on build cost, net yield after holding and management expenses, payback period in years, and the estimated equity uplift to the parent property at completion.

Inputs that drive the result. Build cost is the biggest single lever; we’ve loaded 2026 Western Sydney rates by size and finish tier ($140k–$260k for one to two bedrooms). Weekly rent uses CoreLogic and Rent Bond Board medians by suburb and dwelling configuration; override it if you have a specific tenant lined up or local agent advice. Vacancy is set to 4% (just over two weeks per year, which matches actual Western Sydney granny flat turnover data); management fees default to 8% if used. Expenses include $1,200 council rates for a secondary dwelling, $1,500 maintenance reserve, and landlord insurance at typical 2026 premiums.

What the calculator doesn’t do. It doesn’t model capital gains tax or depreciation deductions (Division 43 capital works and Division 40 fittings typically generate $4,000–$8,000 of annual tax deductions on a new granny flat — ask your accountant). It doesn’t include site-specific cost factors like sloping land, reactive soil or service connections to a separated main dwelling. And it assumes the granny flat is rented to an unrelated tenant; if a family member lives in it rent-free the cash-flow side of the model is moot but the equity uplift to the property still applies.