Multi-Generation Living

The recent increase in the number of granny flats in Australia is a sign of a growing trend towards multi-generation living. This type of setup is becoming increasingly popular due to several factors, such as a rise in the aged population, affordability, and lifestyle preferences.

Multigenerational living is when more than one generation of a family lives together on the same property. There are several reasons for this:

• To downsize from a large home to a more manageable space

• Following a late-life divorce

• To ease financial difficulties

• Assist your children with childcare

• To live closer to family

• Separate accommodation for teenagers or young adults

A granny flat is the most common form of multigenerational living and can be an addition to, or part of, an existing home, or a separate building on the property. Granny flats are a great choice for multigenerational living as they offer the comfort of being around family as well as providing everyone with their own space and privacy. You can even separate the two houses by fencing and garden beds to create your own peaceful retreat.

For many seniors, a granny flat offers a cheaper alternative to retirement homes and senior living facilities. In addition, some seniors may prefer to remain independent yet still be close to their family, having a granny flat provides that option. 

For younger generations, a granny flat can improve their quality of life. By having an extended family member living close or even on the same property, they can share resources, enhance security, and reduce costs while still having their own space. 

That being said, there are some challenges that need to be addressed to ensure that this type of living arrangement is beneficial for all members. For example, local regulations may need to be updated to ensure that these dwellings comply with safety and accessibility standards. 

Investment Opportunity

Another reason for the increase in Granny Flats is that it offers a great investment opportunity by offering a way to generate a passive income. Since the new Affordable Housing SEPP was introduced in 2009, the vast majority of Granny Flats built have been for property investors looking for capital growth and a return on their investment. A granny flat can increase one’s property value by either:

• Building a granny flat to flip your property, this will attract buyers looking for a dual-income opportunity.

• Building a granny flat to increase the value of your rental property to generate a long-term passive income and dual rental income from the same property. 
  

But before you jump in and buy or build a granny flat you will need to ensure it is fully compliant with all the relevant laws as each state has different laws around it. Check with your local council to find out what regulations apply in your area, but as a general rule your granny flat will need to:

• Be built on a property zoned for residential use

• Be built on a property at least 450 square metres in size

• Be the only granny flat on the property

• Be owned by the same person that owns the primary dwelling on the property

• Have a maximum living space of around 60 square metres (this figure varies and typically excludes verandahs, carports and patios)

• Have separate and unobstructed pedestrian access

As housing affordability issues continue to be a problem in Australia's capital cities, it's becoming more difficult to find an affordable, low-maintenance rental property in a desirable location. A granny flat is a great way to use the space you already own to maximise your income or to offer a multigenerational living situation.

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