Granny Flats vs. Tiny House: What’s Best For You?

Are you looking to make use of your extra backyard space? With Sydney’s growing demand for livable space, adding a tiny home or granny flat can unlock revenue and make your property more valuable. But which option is right for you? Actually, don’t answer that. We’ll answer it for you…

Are you tossing up between a tiny house or a granny flat?

Both structures are small and relatively affordable while expanding your living space. But there is a range of differences to take into account before choosing between these two abodes.

If you’re excited to downsize your life, create a secondary stream of rental income, or add value to your property, this article is for you. We’ll show you the major differences between Sydney granny flats and tiny homes, and help you decide which option is right for your space, budget, and lifestyle goals.

From price to council requirements and everything in between, read on to find out what sets these two independent living spaces apart.

What are the differences between a granny flat and a tiny house?

Similar in appearance, there are unique differences between granny flats and tiny houses. An accessory apartment is a self-contained house, typically built in the backyard of a family home. Coming in one, two, or three-bedroom floorplans, you’ve got flexibility over your size. This leads to a self-contained home connected to all necessary utilities.

A tiny house, in contrast, is a moveable dwelling with an average floor size of 39m2 and typically one bedroom. This makes it smaller than an apartment. Tiny houses are typically no bigger than a caravan and don’t offer the same extended living space, as a granny flat, but do present an affordable living option ideal for individuals looking to enjoy an off-grid lifestyle or avoid the permits and certifications needed for the construction.

Both living spaces represent flexibility, but freedom comes in different forms. That freedom comes from the moveability of a tiny house. And it comes from a secondary living space in the form of an accessory apartment.

Granny Flat: Pros and Cons

If you’re stuck between two options, a pros and cons list can help. When it comes to an accessory apartment, the major advantage comes from the high level of comfort. Modern granny flats are self-contained homes with all amenities from insulation, heating and cooling, WiFi, outdoor verandahs, and ample storage.

As this type of accommodation is a fixed asset, this makes it easier to get support from lenders who can finance your project. Lenders have confidence in them as they can add value to your property. With house prices in Sydney soaring, this type of accommodation creates a way to spread living costs and that’s attractive to potential buyers.

With the granny flat rental reaching up to $650 per week, one of the major advantages comes in the form of passive income.

As exciting as these benefits are, it’s important to recognise that accessory apartments aren’t as small an investment as a tiny home. Between council rules and the cost of construction, you’ll be investing time and money in a serious home improvement upgrade.

Looking to create an additional income stream from your new granny flat?

Tiny House: Pros and Cons

Don’t let the size of a tiny house fool you, there are plenty of advantages that come with this living space. For a start, a tiny home can be a flexible investment (if built with wheels) so you can move your tiny home anywhere you want.

A more affordable option, your own tiny house won’t require the financial obligation of design and construction. If you choose to downsize your life and move into your tiny house you can also save on bills with less cooling and heating required. Throw in the lack of paperwork required and a tiny house can be an appealing option.

However, a tiny house is just that - tiny. Not much bigger than a caravan, a tiny home isn’t the type of space to host friends or family. It’s also not ideal for more than one person or a couple. This means you won’t be able to generate close to the same rental income as an accessory apartment as there is less space (which means less storage, fewer amenities, etc.)

Which option is more expensive?

A tiny house is typically cheaper to build than an apartment - but price alone doesn’t tell the whole story. You can expect to build a tiny house for between $30,000 and $60,000. In contrast, the average price of a new accessory apartment falls between $120,000 and $150,000.

Both options can help create an extra stream of income through rent (and with Sydney’s crowded property market this is an exciting advantage to either option).

However, the smaller floor space of a tiny house (39m2 or less) means a less inviting space whether it’s for you or as a stream of rental income. In contrast, a granny flat (60m2 to 90m2) can pose a more enticing space for singles, working professionals, or even small families to rent.

This makes the initial higher costs worth it to many Sydney homeowners who are looking to make an investment in their unused backyard space. Keep in mind, an accessory apartment can also help add value to your home so if you decide to sell, you’ll have more options on auction day.

What is the council planning difference?

Building an extra living space is exciting whether it’s a stylish apartment or a contemporary tiny home. However, there are differences in the planning and paperwork required.

Most noticeably, there are no council requirements when building a tiny house - as long as it is mobile. You can add a tiny house anywhere on your property regardless of property size or street frontage. This is because tiny homes are classified as caravans.

In contrast, a granny flat is a fixed building on a fixed foundation. As a result, you are subject to certain council regulations. DA planning fees and council levies may apply so you will need more of a planning process to design and construct an accessory apartment on your Sydney property.

If your Sydney property is larger than 450m2 and has a minimum of 12m of street frontage, you may be exempt from council regulations, so speak to a member of our team to find out more about your specific Sydney council rules.

P.S Check out our construction timeline to see how easy and stress-free it is

Questions to ask before making your choice…

It’s easy to feel overwhelmed comparing your choices on Google or watching YouTube videos about using excess backyard space. The easiest way to stay on track and make the choice that’s best for you is to as yourself the following questions…

• What’s your budget?
• What’s your site access?
• How much space do you have?
• How quickly do you need extra accommodation?
• How many people are you looking to accommodate?
• Are you looking for rental income or extra living space for yourself?

Answering these questions will help you figure out your best option. We understand the consideration that needs to come with a major choice like this. That’s why we’re proud to offer 100% FREE consultations to help you explore your options, compare prices, and picture your own apartment without committing a thing.

Click here to arrange your FREE consultation

Looking to utilise your extra backyard space?

We’re experts in taking unused backyard space and turning it into passive income or an extra living space for your friends and family.

Maybe your kids have moved out and you’re not using your yard like you used to. Or, maybe you’ve seen the sky-high rental prices in Sydney and want to take advantage of the growing desire for housing. Whatever your goals, we’re a family builder that treats your home like it was ours.

The result is a personalised design to suit your needs, a fast and stress-free build, and support through each step so you can focus less on paperwork and more on your exciting new granny flat. If you’re ready to learn more, call today on 04 9191 3030 or get in touch to organise your FREE consultation.

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