Why Are Granny Flats the Smartest Investment for Melbourne Homeowners?
Melbourne homeowners are discovering that the backyard isn’t just for gardens anymore—it’s an opportunity. Granny flats (also called secondary dwellings, dependent person’s units, or backyard homes) are becoming one of the most practical, profitable, and future-ready property investments in Victoria.
They’re no longer “tiny shacks” or “old-style add-ons.” Today’s granny flats are architecturally designed, comfortable, sustainable living spaces that meet the needs of modern families while adding serious value to your property.
At Radevo Living, we specialise in designing and building granny flats across Melbourne that support multigenerational living, rental income, and lifestyle flexibility. Whether you want to give ageing parents independence, help adult children save for their own home, or unlock rental income, a well-designed granny flat is the key.
In this detailed guide, we’ll cover the five essential design must-haves, plus explore compliance, investment potential, and real-life applications that will inspire your next build.
Why Are Granny Flats in Melbourne Growing in Popularity?
The demand for granny flats is skyrocketing in Victoria, and it’s easy to see why:
Housing affordability pressures: With Melbourne property prices still outpacing wage growth, families are looking for affordable solutions for adult children or retirees.
Multigenerational living: Cultural shifts and rising costs mean more families prefer living together—yet still value independence.
Rental opportunities: Granny flats can create a steady secondary income stream for homeowners.
Property value boost: A high-quality, compliant granny flat can increase resale appeal dramatically.
Work-from-home trend: Many owners repurpose granny flats as home offices or studios.
In fact, reports suggest granny flats can increase a property’s value by 20–30%, depending on suburb demand and design quality.
The 5 Design Must-Haves for Granny Flats
Smart Space Planning: Maximising Every Square Metre
With floor areas often capped around 40–60m², clever space planning is crucial. Granny flats must feel functional and spacious, despite their compact size.
Open-plan layouts: Combining kitchen, dining, and living in one zone creates flow.
Multipurpose areas: A dining nook that doubles as a study area, for example.
Vertical design: Using high ceilings, tall storage, and shelving to expand usable space.
Furniture integration: Wall beds, modular sofas, and built-ins to reduce clutter.
At Radevo Living, our designs always balance comfort with compliance, ensuring every centimetre is purposeful.
Accessibility & Universal Design: Building for All Generations
If your granny flat is meant for elderly parents or future use, accessibility isn’t optional. Universal design principles make the space safe, practical, and welcoming for everyone.
Features to consider:
Wide doorways and hallways for wheelchairs and walkers.
Zero-step entry for ease of access.
Lever handles instead of knobs for those with arthritis.
Walk-in showers with non-slip flooring.
Future-proof wiring for medical equipment or mobility devices.
This ensures your granny flat supports long-term usability, regardless of who lives there.
Natural Light & Ventilation: Health and Comfort by Design
A dark, stuffy granny flat can feel claustrophobic. Instead, maximise natural light and airflow:
Large windows facing north for sunlight.
Cross-ventilation with strategically placed openings.
Skylights or clerestory windows for added brightness.
Insulated walls and glazing for Melbourne’s hot summers and chilly winters.
Connection to outdoors: sliding doors opening onto a small deck or garden.
Not only does this create a healthier, happier environment, but it also lowers ongoing utility bills.
Kitchens & Bathrooms That Work Hard
These spaces aren’t “add-ons”—they’re what make the granny flat feel like a self-sufficient home.
For kitchens:
Compact appliances (two-burner cooktops, under-bench fridges).
Ample bench space for cooking.
Clever storage: pull-out pantries, overhead cupboards.
For bathrooms:
Frameless glass showers for accessibility.
Floating vanities to save space.
Durable tiles and finishes.
Pro Tip: Even small upgrades—like quality tapware or stylish tiles—can make a granny flat look modern and appealing to future tenants.
Privacy & Independence: Essential for Multigenerational Harmony
Granny flats are meant to bring families closer, but independence is key to making it work long-term.
Design for privacy by:
Separate entries to reduce overlap with the main home.
Soundproofing walls and ceilings.
Landscape screening (trees, fences, garden beds).
Independent facilities: their own kitchen, bathroom, and laundry.
A well-designed granny flat allows family members to live together without stepping on each other’s toes.
Bonus Considerations for Melbourne Granny Flats
Energy Efficiency & Sustainability
Eco-conscious design isn’t just good for the planet—it’s attractive to tenants. Options include:
Solar panels
Water tanks
LED lighting
Double-glazed windows
These also reduce running costs for long-term occupants.
Council Regulations & Permits in Victoria
Building a granny flat isn’t as simple as picking a design and building. Victoria has strict planning laws that vary by council.
Some councils allow dependent person’s units for family members only, not rentals. Others restrict dwelling size, setbacks, or usage.
At Radevo Living, we guide you through every regulation—ensuring your granny flat is fully compliant before construction begins.
Financial Considerations
Rental Income: Granny flats in Melbourne can generate $300–$500 per week depending on location and finish.
Resale Value: Buyers see extra dwellings as a premium feature.
Taxation: Rental income is taxable, and capital gains tax may apply if you sell—always consult a tax advisor.
Different Uses Beyond Family Living
- Home office or creative studio.
- Airbnb or short-term rental.
- Guest house for friends or relatives.
- Teen retreat or young adult accommodation.
- Future downsizing option for homeowners themselves.
Building the Right Granny Flat with Radevo Living
Granny flats are no longer just a place for grandparents. They’re modern, versatile, and profitable living spaces that support multigenerational living, generate rental income, and increase property value.
By focusing on smart space planning, accessibility, natural light, functional kitchens and bathrooms, and privacy, you can create a granny flat that works beautifully for both family and investment purposes.
At Radevo Living, we take the stress out of the process. From design and permits to construction and finishing, we ensure your granny flat is compliant, stylish, and tailored to your goals.
Ready to unlock the potential in your backyard?
At Radevo Living, we’re here to make the process simple and stress-free. Book a free consultation and let’s map out the best way forward for your property.
